Why hasn't Adani's $100 billion loss tanked Indian markets?

Economy and Finance

Why hasn't Adani's $100 billion loss tanked Indian markets?

13 Feb 2023 Zinkpot 157

The Economic Times - When shares of the Adani Group, until recently India's largest conglomerate, began their free fall late last month, shedding more than $100 billion in days, some observers worried that the collapse could bring down the country's capital markets, and with them the Indian economy. Read more

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The Indian economy has recently surpassed Britain's to become the world's 5th largest, and it is the only big one, China's included, that has witnessed strong and steady growth since pandemic restriction were relaxed.
Even after Adani's collapse last month, which held the Indian equities steady last week, India's main market index is nearly 2.5% above where it stood a year ago, even as U.S. stocks have fallen by more than 4% during the same.
This ardent behaviour of India's economy is attributed to the size and seeming strength of the broader Indian business landscape. Adani fell spectacularly after it was accused of fraud and stock manipulation by a small New York trading firm, but the debacle is barely splash from the big Indian bucket.
India is home to about 1.5 million companies and well-capitalised stock market. It's National Stock Exchange fluctuated comfortably between $3 trillion and $3.5 trillion last year.
Opaque structures complicated by cross shareholding, may be even puffery in the bookkeeping were the flaws identified by Adani's critics, which can be found in other Indian companies as well, if on a much smaller scale. But many of India's actually profitable firms are relative models of morality.
Several rank on a list kept by Refinitiv, an international market provider, of the world's best-governed companies, including Infosys and Dr Reddy's Laboratories.
Even Hindenburg Research, while calling the Adani Group "the largest con and financial history" itself sounded a bullish note on India proper, calling it "an emerging superpower with an exciting future."
But after this Adani fiasco, the reputation of Indian regulatory system has taken in knock and the Prime Minister Narendra Modi has faced questions about his closed ties to the Adani Group's founder, Gautam Adani.