Strength of India intact, forex reserves swelled by $8 billion in last two days: FM

Finance Minister Nirmala Sitharaman said India’s foreign exchange reserves increased in the past two days by $8 billion, an indication that developments surrounding the Adani Group, including the cancellation of the follow-on public offering of Adani Enterprises, have not affected overseas investor sentiment.

In an interaction with the media in Mumbai on Saturday, the finance minister said that Adani’s withdrawal from the FPO will not have any impact on the perception about India. “Our macroeconomic fundamentals, the picture of our economy, none of it has been affected. The fact that we had $8 billion in growth in foreign exchange reserves over the last two days shows that the perception of India and its inherent strength remains,” she said, adding that modeling organizations would come and go and that the Adanis weren’t the only ones. who have publicly withdrawn. problems.

Read also: S&P downgrades two Adani companies, and removes AEL from its sustainability indexes

Over the past two weeks, there has been intense scrutiny in India as stock markets have suffered the brunt of selling pressure after Hindenburg Research, a short-selling hedge fund, leveled allegations at Adani Group accusing it of misconduct, including manipulation and fraud. . While the Rs 20,000 crore FPO was fully subscribed by Adani Enterprises, the group decided to cancel it on the grounds that the stock was volatile and the interests of the investors were paramount.

The Adani Group, through its various entities, is involved in important infrastructure projects across the country, including roads, airports and ports, and concerns have been raised about the impact on the economy if the group runs into financing problems.

Two global rating agencies, Fitch Ratings and Moody’s Investors Services, have not initiated any rating action in relation to the credit ratings of Adani Group entities, but have said they are monitoring the situation with regard to the group’s ability to raise funds. However, global ratings agency Standard & Poor’s revised the rating outlook for two entities, Adani Ports and Adani Elkectricity, to negative from previously stable.

On the allegations against the Adani Group, corporate equity and debt exposure to banks, Sitram said regulators such as the Reserve Bank of India and Securities and Exchange Board of India “They will do their job.”

“The organizers are independent,” she added.