Credit Suisse assigned zero value to Adani bonds; what does it mean?

Credit Suisse has assigned zero value to the Adani stocks | So, so things are not at all well for India’s Adani group. Hindenburg's report has created turmoil in the invincible Adani empire. 

Switzerland’s investment banking company Credit Suisse has assigned zero value to the Adani bonds. That is to say, the Adani Group can’t get margin loans from the private banking clients of the above-mentioned Credit Sussies putting their company stocks are collateral. According to the Swiss lender’s private banking arm, the stocks have no value, and Adani Group can use other collaterals for the loan.

Till this time, Adani Group was shouting on Credit Rating and Sovereign rating .. now Credit Suisse has assigned a zero lending value for notes by it and stocks crashes further by 30% more. What @SEBI_India is waiting for enquiry now?

— CA Prabhash Jha (@prabhashj) February 1, 2023

Read more: Credit Suisse’s Wealth Unit Halts Margin Loans on Adani Debt - Bloomberg  

This assessment is of some entities under the Adani Group, not all. The entities are namely, Adani Ports & SEZ, Adani Green Energy, and Adani Electricity Mumbai. All the information is through Bloomberg report. 

According to Bloomberg, if a private bank ‘cuts lending value to zero’, clients typically have to top up with cash or another form of collateral, or else their ‘securities can be liquidated.’

Two European banks and Singapore-based banks are still issuing margin loans on the Adani stocks, amidst the concerns.

Interestingly, the equity research arm of Credit Suisse ‘upgraded Adani Ports to Outperform from neutral’ in a report published on Tuesday.

Read more: Adani Group: The curious case of Credit Suisse

People are also suggesting that it is a revamping inside Credit Suisse itself, as there have been a series of scandals, and allegations.

Timeline of the fall

80% of Gautam Adani’s wealth has been acquired in the last three years. Remember, in the last three years, the world was witnessing and recovering from a pandemic. The growth of the empire has seen no borders and has brought much-needed scrutiny to the company's finances.

Read more: Credit Suisse Reportedly Assigns Zero Lending Value To Adani Group Bonds Following Hindenburg Allegations 

First was the Washington Post reportage in December on Adani’s coal power plant in Jharkhand, and how the Adani group is benefited from its political ties. Second, in line was the Hindenburg report in January. The stocks started falling, and the group had to call back the FPO worth Rs 20,000 crore. And now, Bloomberg’s report on the zero value of Adani bonds.

A company can’t fall overnight due to a report. Till now, Hindenburg’s research hasn’t been declined comprehensively by the group. Maybe, that’s why they are still facing the fall in the market.

Read More

• Gautam Adani slips out of list of world’s top 10 richest people
• What is short selling that erased $65 billion of Adani group in three days?
• Hindenburg reply to Adani: What has happened so far?
• Know all about Shah Dhandharia & Co, CA firm which audits Adani group
• What is Hindenburg research, and is the CIA behind it?
• Who is Nathan Anderson, person behind Adani’s Hindenburg report?
• Who is Chang Chung-Ling and, does Adani have a Chinese connection?

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