Mumbai: The crisis engulfing the Adani group intensified on Monday as hundreds of members of India’s opposition parties took to the streets to press for a probe into allegations made by the US short-seller that triggered its slide in the market.

Shares of billionaire Gautam Adani’s companies have been in a free-fall since Hindenburg Research’s January 24 critical report, with group cumulative market losses now exceeding $110 billion, raising fears of wider financial contagion.

Opposition parties, which last week called for a parliamentary panel to investigate the saga and stalled proceedings, have questioned Indian Prime Minister Narendra Modi’s closeness to Adani. The protesters also expressed anger about the investments made by the state-backed Life Insurance Corporation (LIC) and State Bank of India (SBI) in the Adani Group on Monday.

Adani has rejected in detailed rebuttals the Hindenberg report’s allegations of stock manipulation, use of tax havens, and criticism that it had unsustainable debt.

The billionaire and Modi are from the same state and Adani has repeatedly denied allegations by Modi’s opponents that he had benefited from their close ties. Modi’s government to has denied allegations of favoring Adani. At New Delhi’s Jantar Mantar, a Mughal-era observatory that doubles up as a protest site for all causes, protesters held up banners and shouted slogans against Adani. Some broke through barricades, forcing the police to detain them.

Hundreds of members of the Congress party protested across the country, including outside several offices of state-owned insurer Life Insurance Corporation (LIC) and State Bank of India (SBI), both of which have exposure to Adani group companies. At Jantar Mantar, some burnt a suitcase with an SBI logo on it. In Mumbai, a protester held a placard with Adani’s photo and the LIC logo, explaining with a bar chart “How much has LIC invested in Adani Group”.

LIC holds a 4.23% stake in the flagship Adani firm, while its other exposures include a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas. SBI said last week its total exposure to Adani Group was 0.9% of its total loan book, or around 270 billion rupees ($3.30 billion).

Separately, a move by Adani Group on Monday to calm investors’ nerves failed to stem the market rout. It said it would pre-pay loans of around $1.1 billion taken against pledged stocks in Adani Ports and Special Economic Zone, Adani Transmission, and Adani Green Energy, allowing it to get back the shares.

Shares of Adani Enterprises closed down 0.9% on Monday after sinking as much as 9.6% in early trade. Adani Transmission dropped lost 10%, while Adani Green, Adani Total Gas Ltd, Adani Power, and Adani Wilmar fell by 5% each. The crisis has become the biggest business and reputational challenge for 60-year-old Adani, whose fortunes had risen sharply in recent years as he expanded his group’s business interests that spanned from ports to mining. Both houses of India’s parliament were adjourned on Monday, the third consecutive day, amid sloganeering and demands to launch an inquiry.

In the brutal fallout of the Hindenburg report, Adani Enterprises Ltd, the flagship company of the Adani Group, was forced to abandon a $2.5 billion share sale last week, and Adani lost his crown as Asia’s richest man and lost his position among the wealthy. The global ranking slipped down.

The stock market plunge triggered a series of credit rating warnings on Friday, with Moody’s saying the group may struggle to raise capital, and S&P cutting its outlook on two group companies.

By Archana

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