India resilient to stock market blip, says Minister Ashwini Vaishnaw

Union IT Minister Ashwini Vaishnaw (File Image: ANI)

India’s economy will withstand the selloff caused by allegations against Adani Group, while any impact on the broader equity markets is set to be short-lived, a top minister said.

“India has a very broad spectrum of infrastructure companies,” Ashwini Vaishnaw, the minister for tech and railways, told Bloomberg TV on Thursday. “Whatever blip is there on the stock market is not going to affect the overall economy, I am very sure of that.”

Billionaire Gautam Adani’s mining-to-infrastructure conglomerate has lost $92 billion in market value since US-based short-seller Hindenburg Research published a report Jan. 24. Adani’s group has denied the allegations, but its flagship company axed a record $2.5 billion domestic share sale on Wednesday.

Adani Group consists of half a dozen major companies with interests ranging from energy to transportation and infrastructure development. It is India’s largest port operator and manages some of the country’s biggest airports.

On Wednesday, a brief rally in Indian stocks caused by Prime Minister Narendra Modi’s budget boost fizzled as risks around Adani Group companies resurfaced to roil investor sentiment.

Vaishnaw declined to comment on how allegations against Adani were being assessed by the government. India has a robust regulatory system which would be doing that evaluation, he said.

The exposure of Indian banks and insurance companies to the Adani Group is limited, India’s chief economic adviser told Bloomberg TV on Thursday. Investors will look through the “short-term noise” in India, Venkatraman Anantha-Nageswaran said. “At this point we are watching the situation.”