Image Source: MoneyControl
Uday Kotak has stated that he does not see a systemic danger to the Indian financial system, days after financial contagion spread in India as the Adani Group’s problems deteriorated.
The head of Kotak Mahindra Bank referenced the Adani Group upheaval in a tweet on February 5, stressing that recent developments do not pose a systemic threat to the Indian financial system. He noted that huge Indian corporations rely more on international sources for loan and equity financing.
”This creates challenges and vulnerabilities. Time to further strengthen Indian underwriting and capacity building,” Kotak noted.
I do not see systemic risk to Indian financial system from recent events. However,large Indian corporates rely more on global sources for debt and equity finance. This creates challenges and vulnerabilities. Time to further strengthen Indian underwriting and capacity building.
— Uday Kotak (@udaykotak) February 5, 2023
Last week’s release of a Hindenburg Research report, in which the American short-selling company accused the Adani Group of stock manipulation and unsustainable debt, precipitated the Adani Group crisis. The organisation has denied the charges.
Since the release of the study, the market value of Adani Group firms has dropped by nearly half. The decline generated fears about the financial sector as a whole. Since the Hindenburg report, the market value of Adani’s seven publicly traded companies has decreased by around fifty percent, totaling more than $100 billion.