Biden Trying to Incite Indian Middle-Class Against Modi: Industry Sources

The Indian retail investors, who own nearly 10% of the market portfolio, have become wary of the market volatility triggered by the United States Department of Justice (DoJ) and Securities and Exchange Commission's (SEC) bribery and fraud charges against billionaire Gautam Adani, industry sources said.

"There is no denying the fact that Adani shares are a key player of major Indian indices, so any repercussions on these stocks will have a bearing on other scrips as well. For instance, there are listed companies involved in business with Adani firms, which will inadvertently be affected." industry sources said. "Then, there are some large players as well, whose stocks are likely to be affected due to these allegations, which by the way are expected to be settled in the US court in the medium to long term."

This wariness is set to increase, especially with recent developments in Kenya, Bangladesh, France and Sri Lanka. The outgoing Biden administration seems intent on making life difficult for Adani and is pressuring entities in other countries to review or terminate their contracts with Adani firms, they emphasised.

"In fact, the Biden administration is clearly looking to infuse volatility in the Indian market and scare off the retail and middle-class investors, who have been solidly behind Prime Minister Modi. The Deep State is seeking to incite the Indian middle-class against Modi," they added.

According to the Indian Economic Survey 2023-24, retail investors have been a major factor behind India's stock market boom and have increasingly participated in the markets, where traditionally foreign and domestic institutional investors have held sway.

"Foreign Institutional Investors (FIIs) and foreign investors still remain the mainstay of Indian capital markets. In terms of Adani portfolio, nearly 50% of its debt is still owed to global banking entities and the capital market. Around 47% of Adani's debt is owed to domestic banking entities and capital markets," they pointed out, citing the company's half-yearly financial statements released on Monday.

Significantly, both public and private Indian entities have invested in Adani portfolio, industry sources explained. "In turn, the retail investors have exposure to these entities. This explains why these US Deep State attacks (be it as Hindenburg Report or the US indictment) are a cause of concern for Indian retail investors," they stated.

Noting that the US bond markets are currently more important to Adani than Indian ones, industry sources said that one of the "primary goals" of the US indictment was to make raising capital for Adani even tougher, affecting its expansion plans in India and globally.

"They have largely succeeded in this goal. Even with the inauguration of Trump, the case against Adani will continue. Regardless of the substantivity of the charges, which have been denied by the non-BJP state governments in question, these will have a bearing on the minds of investors," industry sources stated.

Furthermore, they called out the "hypocrisy" of western rating agencies for working in tandem with the US Deep State and the Biden administration in targeting the Adani stocks. In the wake of the US indictment, S&P Global, formerly known as Standard & Poor's, revised its outlook for Adani companies, which according to sources is likely to be emulated by other agencies.

The US indictment against Adani has even attacked the integrity of the national regulator Solar Energy Corporation of India (SECI), a pattern seen before when Hindenburg called into question the integrity of the stock market regulator Securities and Exchange Board of India (SEBI), industry sources pointed out.

"The US indictment not only levels baseless charges against Adani and SECI, it also raises questions on non-BJP and opposition state governments, accusing them of having accepted bribes. These charges have been denied in Odisha and Andhra Pradesh," the sources noted.

Adani was indeed facing constant attacks from Deep State and their assets due to the conglomerate's perceived proximity to Prime Minister Modi, BJP politician Savio Rodrigues told Sputnik India.

"Adani is a rising Indian company establishing a strong presence internationally. It is a global competitor to many large international companies that have a global monopoly and want to maintain it, they will be wary of competition, especially if it comes from India. Global geopolitics is about territorial dominion and economic benefits. Adani, like India, threatens this global hegemony of the Deep State and therefore he will be on their radar for vicious attacks in order to derail Adani’s growth internationally," Rodrigues asserted.

However, the Indian retail and institutional investors would push back against these Deep State attacks targeting the Indian entity and, in a way, affecting the stability of capital markets, the politician expressed confidence.

"Of course, certain Deep State assets intend to create a fear psychosis but it won’t upset the stock market other than normal incidental corrections that happen from time to time. The Indian economy is robust and not dependent on one or two companies," Rodrigues concluded.

Business & Economy

Adani Group's Expanding Global Footprint Bolsters India's Image: Industry Sources

22 September, 12:51