‘Adani Group’s FPO withdrawal has not impacted India’s economy’: FM Sitaraman
- ByStartupStory | February 4, 2023
The recent decision by Adani Group to withdraw a Rs 20000 crore FPO amid allegations of financial wrongdoing has not harmed India’s economic image, Finance Minister Nirmala Sitharaman said on Saturday. According to the finance minister, the currency reserves have increased by USD 8 billion in the last two days alone.
“…our macroeconomic fundamentals or our economy’s image, none of which has been affected. Yes, FPOs (follow-on public offers) come in, and FIIs (foreign institutional investors) get out,” Sitharaman told reporters here.
The minister stated that there are “fluctuations” in every market, but the accumulation over the last few days demonstrates that the perception of India and its inherent strengths remains intact.
In response to a broader question about the allegations against Adani Group, she stated that the country’s independent financial sector regulators will investigate the matter and that capital markets watchdog Securities and Exchange Board of India has the resources to ensure market stability.
“…for keeping the market and the markets regulated in prime condition, the Sebi is the authority. And it has the wherewithal to keep that prime condition,” she said.
The finance minister also stated that the RBI has already spoken out on the matter, referring to a statement issued on Friday that stated that the banking sector is resilient and stable.
Hindenberg Research, a US-based short seller, made a slew of corporate governance allegations against Adani Group about ten days ago. The Ahmedabad-based group has denied all allegations, calling it a planned attack on India. Even though it managed subscriptions to the FPO, it was cancelled.
On Saturday, Finance Secretary TV Somanathan stood by his comment on the controversy in which he called it a “storm in a teacup,” clarifying that he was referring to macroeconomic terms and the stability of India’s public financial institutions.
Meanwhile, Somanathan stated that the decision to convert outstanding dues at Vodafone Idea into equity is being done as a package for all telcos.
He stated that the government stake will be held by the Department of Investment and Public Asset Management (DIPAM), with the stake considered a public shareholder.
DIPAM secretary Tuhin Kanta Pandey stated that the price was set at Rs 10 despite the fact that Vodafone Idea shares were trading lower on bourses because preferential allotments are required by law to take place at the face value of a share.
The finance ministry officials present at the meeting also stated that the changes in insurance taxation will have no impact on the policy agenda of deepening penetration, and that there was sufficient data to suggest that investments were masquerading as insurance premiums, so a decision was made to tax the same.
According to Sitharaman, no timeline has been set for the end of the old tax regime, and the government has only introduced a simpler new tax regime with lower-rate incentives.
Officials also denied that this would have an impact on the economy’s savings. According to Chief Economic Advisor V Anantha Nageswaran, citizens are being given a broader range of options for determining what they want to do with their money.
In response to a question about the controversial p-notes for GIFT City, Somanathan stated that it competes with other international financial services centres, so such provisions must be made, and that India reserves the right to mitigate any perceived risks.
“Some of the public sector refineries and other infrastructure facilities in the petroleum sector need retrofitting to meet our ambitious emissions and pollution targets,” he said
According to Somanathan, the Rs 35,000 crore budgeted for green initiatives will be used primarily for retrofitting petroleum refineries and increasing strategic storage capacity.
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