“Contagion concerns are growing, but still limited to the banking sector,” Charu Chanana, a market strategist at Saxo Markets in Singapore, said on Friday.
The Reserve Bank of India said that the country’s banking system remains resilient and stable. State Bank of India said it was not concerned about the risk exposure to the Adani group, but would evaluate further financing for its projects “on its own merit”.
Shares of Adani Enterprises closed 1.4 per cent higher, their lowest since March 2021 after falling 35 per cent earlier. Its losses since the previous week totaled nearly US$33.6 billion, a 70 per cent drop.
Shares of Adani Total Gas, which has a joint venture with France’s Total Energy, declined 5 per cent, which said its exposure to Adani companies was limited.
Adani Ports & Special Economic Zone was up 8 per cent, while Adani Transmission and Adani Green Energy were both down 10 per cent.
S&P cut its outlook on Adani Ports and Adani Electricity to negative from stable, saying “there remains a risk that investors remain concerned about the group’s governance and disclosures, which are currently factored into our ratings.”
India’s Disinvestment Secretary Tuhin Kanta Pandey told Reuters that shareholders and customers of Life Insurance Corp should not be concerned about the risk to the Adani group.
State-owned LIC holds 4.23 per cent stake in flagship Adani Enterprises, while its other exposures include 9.14 per cent stake in Adani Ports.