Even as the Adani Group is facing scrutiny over the allegations made by Hindenburg Research, Uday Kotak said on Sunday that he does not see systemic risk to the Indian financial system from recent events. He, however, said that large Indian corporates rely more on global sources for debt and equity finance, which creates challenges and vulnerabilities.

“Time to further strengthen Indian underwriting and capacity building,” Kotak said in a tweet.

On January 24, 2023, Hindenburg Research, a USA-based research firm, published a report that had several adverse observations regarding accounting practices, related-party transactions, concentrated share ownership by a few overseas investment firms, and the share price movement of the Adani group of companies.

Kotak is among the first Indian leaders to suggest structural changes in the aftermath of the Adani allegations.

SEBI’s reassurance

On Saturday, the Securities and Exchange Board of India (SEBI) reassured participants of market stability. The market regulator said the financial market, represented by Sensex and Nifty, has demonstrated ongoing stability and is continuing to function in a transparent, fair, and efficient manner.

This comes even as S&P Global Ratings said on Friday it has revised the rating outlook for Adani Electricity Mumbai and Adani Ports to “negative” from “stable,” on concerns of increased capital costs and reduced funding access. This is the first rating action by a global rating agency after Hindenburg Research published its report.

S&P Dow Jones Indices announced that it would remove Adani Enterprises from its widely used sustainability indices with effect from February 7.