Union Finance Minister Nirmala Sitharaman on Saturday said that India’s economic image has not not impacted due to Adani Group’s decision to pull out a follow on public offering, or FPO, reported PTI. An FPO is a process where a company raises funds by selling its shares to the public again.

The finance minister added that there has been an accretion of $8 billion (approximately Rs 65,786 crore)to the forex reserves in the last two days alone.

The Adani Group had withdrawn the Rs 20,000-crore FPO after a report by United States-based firm Hindenburg Research on January 24 accused the conglomerate of stock manipulation and improper use of offshore tax havens.

The conglomerate had said it was taking the decision considering market volatility and added it would return the money to the investors.

In the past few days, the Opposition has been claiming that ordinary citizens were losing money on account of investments made by the state-owned Life Insurance Corporation and State Bank of India in the conglomerate led by billionaire Gautam Adani.

On Saturday, Sitharaman said there are fluctuations in every market but the accretion over the last few days establishes the fact that the perception of both India and its inherent strengths is intact.

On the allegations against Adani Group, the minister said the country’s independent financial sector regulators will be looking into them,

“For keeping the market and the markets regulated in prime condition, the Sebi [Securities and Exchange Board of India] is the authority,” she added. “And it has the wherewithal to keep that prime condition.”

On Friday too, Sitharaman, along with the Reserve Bank of India, had sought to allay concerns about overexposure of banks and insurers to the crisis-ridden Adani Group. A day later, the Securities and Exchange Board of India also said that the stock market has demonstrated stability and is continuing to function in a “transparent, fair and efficient manner”.

Sitharaman on Friday said that both the LIC and SBI have issued detailed statements on the matter, CNN-News18 reported. “And I know the chairperson or the CMD has himself come out and explained how they are not overexposed or whatever they said and also said look, we are sitting over profits for the exposure that we have, which is well within the limit,” she said.

Sitharaman said that words coming “out of the horse’s mouth” have greater credibility. “They have very clearly said that their exposure is very well within the permitted limits and that they are even now with the valuation falling as well, they are still sitting over profit,” she said.

The finance minister also asserted that India remains a well-regulated financial market, and said that investors will continue to have confidence in it.

“Our regulators are normally very, very stringent about certain governance practices,” she told CNN-News18 in an interview. “So one instance, however much talked about globally it may be, I would think, it is not going to be indicative of how well Indian financial markets are governed.”

Measures taken to address excessive volatility: SEBI

In a statement, the Securities and Exchange Board of India, or SEBI, said that it has put in place a set of surveillance measures to address excessive volatility in specific stocks, referring to the shares of the Adani Group.

“This mechanism gets automatically triggered under certain conditions of price volatility in any stock.” it said.

SEBI also said it was committed to ensuring market integrity and ensuring that the markets continue to have the appropriate structural strength to function in an uninterrupted, transparent and efficient manner.

Banking sector resilient and stable: RBI

Meanwhile, the Reserve Bank of India said that it maintains a constant vigil on the banking sector and on individual banks with a view to maintaining financial stability.

“As per the RBI’s current assessment, the banking sector remains resilient and stable,” a press release said on Friday. “Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy. Banks are also in compliance with the Large Exposure Framework [LEF] guidelines issued by the RBI.”

The State Bank of India’s Chairman Dinesh Khara also said that its overall exposure to the Adani Group is at 0.88% of its loan book, or about Rs 27,000 crore, PTI reported.

Khara said that the bank does not foresee the conglomerate facing any challenge in servicing its debt obligations. He said that the group has an excellent repayment record.

The SBI chairman also said that the bank has not given loans against shares to the Adani Group and also that there has been no refinance request from the ports-to-mining group, according to PTI.

Crisis in the Adani Group

On January 24, Hindenburg Research, a company that specialises in short-selling or betting against a firm’s share price in the expectation that it will fall, alleged in a report that the Adani Group had engaged in decades of stock manipulation and accounting fraud. It also accused the conglomerate of improper use of offshore tax havens and raised concerns about high debt of seven listed Adani companies.

Since the report was published, Adani Group’s combined market capitalisation has collapsed by over $100 billion.

On Friday, shares of Adani Enterprises, the Adani Group’s flagship company, plunged 35% to its lowest level since March 2021 in intra-day trading on Friday, before ending with gains of 1.25%. The stock finished in the green for the first time in seven straight trading sessions on the Bombay Stock Exchange.

Shares of Adani Ports also rose by 7.98% on the Bombay Stock Exchange to end the day at Rs 498.85.