Don't see systemic risk to financial system: Uday Kotak on Adani-Hindenburg row

Amid the growing concerns and sell-off of Adani group stocks after the Hindenburg report, Kotak Mahindra Bank CEO Uday Kotak on Sunday said he does not see any systemic risk to the financial system but it's time to strengthen Indian underwriting and capacity building.

Kotak said large Indian corporates rely more on global sources for debt and equity finance, which creates challenges and vulnerabilities.

Amid concerns over banks' exposure to the crisis-ridden Adani Group, the Reserve Bank on February 3 issued a statement saying that India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders.

US-based short-seller Hindenburg Research made a litany of allegations in a January 24 report, including fraudulent transactions and share price manipulation at the Gautam Adani-led group.

Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

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The Hindenburg report was released on the day when Adani Enterprises' Rs 20,000-crore follow on public offer (FPO) opened for anchor investors. Though the offer was fully subscribed, Adani Group decided to scrap the FPO.

Following the report, Adani Group stocks are witnessing a meltdown on the bourses and the stock price of Adani Enterprises fell by over 70 per cent from its peak of Rs 4,190 in December, last year.

Since January 24, the BSE Sensex has slumped by over 1,000 points largely driven by sell-off in Adani Group stocks.

(with PTI inputs)