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Uday Kotak on Adani saga: ‘No systemic risk to Indian financial system’

by WOOWinvest
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Uday Kotak on Adani saga: ‘No systemic risk to Indian financial system’

Veteran banker and CEO Uday Kotak said that there is no systemic risk to the Indian financial system from the recent events, hinting at the Adani-Hindenburg controversy.

“I do not see systemic risk to the Indian financial system from recent events. However, large Indian corporations rely more on global sources for debt and equity finance. This creates challenges and vulnerabilities. Time to further strengthen Indian underwriting and capacity building,” Kotak said without naming Adani saga.

Adani Group companies have come under intense selling pressure since the past week following a report by New York-based short seller Hindenburg that alleged stock manipulation and fraudulent practices.

The scathing attack last week on the group has questioned its debt levels and use of tax havens. Adani tried to calm the nerves, but failed to do so and eventually had to call off the Rs 20,000 crore FPO. https://twitter.com /udaykotak/status/1622154269247045633

Another Business tycoon Anand Mahindra too backed the Indian market amid concerns in the global media.

“Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force. I’ve lived long enough to see us face earthquakes, droughts, recessions, wars, terror attacks. All I will say is: Never, ever bet against India,” Mahindra said on Saturday.

Following a rout in Adani stocks, Finance Minister Nirmala Sitharaman said that the regulators Sebi and RBI should always be on their toes to keep the equity market stable and indicated that the current crisis was a company specific issue. She said that banks and insurance companies are “not overexposed” to any one company and assured that Indian markets are very well managed by its regulators.

“Yes, there have been occasional blips in the market, maybe small or big, but they do address issues like that. And I strongly believe that our regulators are seized of this matter,” Sitharaman said in an interview to Times Now.

Earlier, the Reserve Bank of India too reassured the investors that the systems in place are robust and that the Indian banking sector remains resilient and stable.

“Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy,” the central bank said in a statement.

Meanwhile, markets regulator Sebi said that surveillance measures are in place to address excessive volatility in specific stocks including the Adani group companies

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