Shares of Adani group companies were pounded again on February 1 amid reports that Credit Suisse’s private banking arm had stopped accepting bonds of Adani companies as collateral for margin loans.
According to a Bloomberg report, the Swiss lender’s private banking arm assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd.
Shares of Adani Enterprises, Adani Ports and Special Economic Zone, and Adani Total Gas settled 10-28 percent lower on February 1.
On the technical chart, the 66 percent retracement of the lows tested in 2022 and the highs of 2022 comes at around Rs 470 for Adani Port and will now act as a key support level, said Rohit Srivastava, founder, Indiacharts.com.
As for Adani Enterprises, the 78 percent retracement level from March 2022 to November 2022 comes at around Rs 2,140, a level that will act as a major support, he said.
Managing to sustain above the two key levels could provide some support to these stocks, however, Srivastava cautioned investors against building fresh positions in these counters until the sentiment around the stocks stabilises.
Stocks of Adani Group companies nosedived last week after American short-seller Hindenburg Research published a report accusing the company of using tax havens and also flagged debt concerns.
In that backdrop, the follow-up public offer of flagship Adani Enterprises failed to garner strong traction from retail investors despite being fully subscribed.
The fall in Adani group counters also pulled dow shares of PSU banks on concerns over refinance risks for lenders that have exposure to the group’s debt.
To pacify these concerns, global brokerage firm CLSA Asia Pacific Markets came out with a report that said there was no perceptible risk to India’s lenders that have exposure to the group.