Who'll finance Indian infra after the Adani scandal?
Financial Express Mumbai|April 14, 2023
AS THE ADANI Group grapples with uncomfortable scrutiny, there's a palpable nervousness in India about what will happen next.
ANDY MUKHERJEE
Who'll finance Indian infra after the Adani scandal?

In just over a quarter-century, the once-modest commodity trader from Ahmedabad has morphed into the country's largest infrastructure player, a debt-fuelled behemoth overseeing a dazzling array of hard assets at home, as well as in Australia, Indonesia, Sri Lanka and Israel.

Allegations that billionaire Gautam Adani has benefited from his proximity to Prime Minister Narendra Modi-strenuously denied by the group - are being raised relentlessly by the Congress Party's Rahul Gandhi and other opposition leaders in a bid to shake Modi's seemingly ironclad grip on power in the lead up to next year's national elections.

All that's happening largely in New Delhi, India's political capital. The big question in India's financial capital of Mumbai, however, is more forward looking. How will the country fill the gaping holes in its infrastructure if the sector - already plagued by chronic low profitability loses access to much-needed global financing in the aftermath of the Adani scandal?

It's been nearly two months since York-based Hindenburg New Research accused the Indian businessman of "brazen stock manipulation and accounting fraud."

Adani is a gigantic asset owner, in control of a number of ports, airports, coal mines, power stations, transmission lines, city-gas networks, solar farms, roads, and data centres. He stepped into a breach. Domestic institutions, such as the Life Insurance Corporation of India, are simply not wired to own stuff that produces steady cash flows. So scared has LIC been of the country's Rent Control Act of 1948 that it hasn't liked to buy tenanted buildings in the past-only vacant ones.

This story is from the April 14, 2023 edition of Financial Express Mumbai.

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This story is from the April 14, 2023 edition of Financial Express Mumbai.

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