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"Indian firms that do not increase their prices and (don't) focus hard on profitability do so at their own peril. The move, while long-sought by overseas law firms, appears to have been somewhat unexpected in its timing. Foreign law firms have yet to announce plans for new offices in India but international firms like Allen & Overy and Herbert Smith Freehills told Reuters they are examining the new rules. Lalit Bhasin, who heads the Society of Indian Law Firms, said there were concerns that a foreign law firm might de facto operate as a full-service firm by hiring local law firms to advise on areas concerning Indian law. "Who is going to monitor whether that foreign law firm is not engaged in practice of Indian laws?"

☆ India's market regulator bars 21 entities in Axis mutual fund front-running case
▼ + stars: | 2023-02-28 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +2 min

MUMBAI, Feb 28 (Reuters) - India's market regulator on Tuesday issued interim orders in a case of alleged front-running at Axis Mutual Fund, while issuing show cause orders to a former mutual fund executive and related entities. The Securities and Exchange Board of India (SEBI) directed that 21 entities be barred from the capital markets until further orders. The regulator conducted a probe in a case of front running in trades of Axis MF between September 2021 and March 31, 2022. The regulator alleged that Joshi conceived a 'fraudulent scheme' in 'collusion' with other 'unscrupulous entities' to front run trades of Axis MF. Further front-running trades were executed from trading accounts of the entities and persons indirectly connected to Joshi.

☆ India setting up $4 bln fund to backstop corporate debt market
▼ + stars: | 2023-02-17 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +2 min

Feb 17 (Reuters) - India is setting up a fund worth 330 billion rupees ($4 billion) to provide liquidity to its corporate debt market during bouts of stress, to help stem panic selling and ease redemption pressures, an SBI Mutual Fund executive told Reuters. During times of stress, the backstop fund could step into the market to buy relatively illiquid investment grade bonds. "This backstop facility fund comes out of Indian market peculiarity that the bonds are investment grade and still illiquid," said Anubhav Shrivastava, partner, Infinity Alternatives, an alternate investment fund (AIF). "The market for secondary corporate bonds is thin which is why we need the buyer and seller of last resort, the backstop fund will do this." The fund is small relative to 39 trillion rupees ($471 billion) Indian corporate bond market, but its size could be increased later, the source said.

☆ Indian market regulator to update finance ministry on Adani probe this week - sources
▼ + stars: | 2023-02-13 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +1 min

MUMBAI, Feb 13 (Reuters) - India's market regulator will update the finance ministry this week on its investigation into the Adani Group's withdrawn $2.5 billion follow-on public issue, two sources familiar with the matter said on Monday. The SEBI board will brief the minister on surveillance measures taken by the regulator during the recent rout in Adani group stocks, the sources added. An update on investigations into offshore fund flows into Adani Group entities is also likely, the sources added. The regulator had undertaken a series of surveillance actions to ensure that the volatility in the Adani group companies' share prices was contained. This will be a part of the brief to the finance minister on Wednesday, the sources said.

[1/3] Indian billionaire Gautam Adani speaks during an interview with Reuters at his office in the western Indian city of Ahmedabad April 2, 2014. Last week, the group's flagship entity Adani Enterprises (ADEL.NS) pulled its secondary share offering, India's largest ever, because of the sharp selloff. Adani has said Monarch was selected for previous share sales "for their credentials and ability to tap into the retail market". On Elara, Adani has said "innuendoes" that the firm was in any manner related to the conglomerate founders were incorrect. The federal corporate affairs ministry, responsible for regulating Indian businesses, has briefed officials in Modi's office and been in touch with SEBI, the market regulator, one of the officials said.

☆ Indian market regulator seeks beneficial ownership details of foreign investors -sources
▼ + stars: | 2023-02-06 | by ( Jayshree Pyasi | ) www.reuters.com time to read: 1 min

MUMBAI, Feb 6 (Reuters) - India's market regulator has written to custodian banks to share details of beneficial owners of offshore funds and foreign portfolio investors, according to two sources directly aware of the matter. The regulator has asked custodian banks to reach out to foreign portfolio investors by March and share the details by end of September, the sources said, speaking on condition of anonymity as the matter is confidential. If they do not provide such details, the regulator would deem the foreign funds in-eligible and ask them to liquidate their holdings in the Indian market by March 2024. There are 11,000 foreign funds registered with the Securities and Exchange Board of India (SEBI). Reporting by Jayshree P UpadhyayOur Standards: The Thomson Reuters Trust Principles.

[1/2] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. On Wednesday, a $2.5 billion sale of shares by one of its companies Adani Enterprises ADEL.NS was called off. Adani Group and the stock market regulator the Securities and Exchange Board of India (SEBI) did not respond to a request for comment. Cracking the code of how Hindenburg did the trade could lead to more short sellers taking positions against Indian companies, which have been rare, analysts said. But several bankers familiar with trading in Indian securities said the more profitable piece of the short seller’s bet would likely lie in the derivative trades it had placed.

The Jan. 24 report has triggered an $86 billion erosion in market capitalisation of seven listed Adani Group companies. "To go through this exercise of a share sale and to call it off raises more questions." After the share sale was pulled, yields of dollar-denominated bonds issued by Adani companies rose on Wednesday. Adani Group was working with its bankers to refund the proceeds received by in the secondary share sale of Adani Enterprises. The share sale had succeeded on Tuesday even when the Adani Enterprises stock price in Mumbai markets traded below the offer price of the share sale.

Spokespeople for SEBI and Adani Group did not immediately respond to requests for comment. Among several allegations, Hindenburg accused Adani Group last week of using offshore tax havens and stock manipulation. On Tuesday, Adani Group mustered support from investors for a $2.5 billion share sale for Adani Enterprises, in what some saw as a stamp of investor confidence at a time of crisis. Reuters Graphics[1/5] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port in Haifa port, Israel January 31, 2023. The U.S. dollar-denominated bonds of Adani Ports maturing in February 2031 led the losses, falling 3.59 cents to 67.58 cents.

☆ Exclusive: Indian market regulator examining Adani share rout, source says
▼ + stars: | 2023-02-01 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +3 min

[1/2] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. Spokespeople for Adani Group and SEBI did not immediately respond to a request for comment. The share plunge was sparked by a report by Hindenburg Research last week which alleged improper use by the Adani Group of offshore tax havens and stock manipulation. The source told Reuters the Indian market regulator is also looking into any possible price manipulation of Adani group stocks, as well as examining possible irregularities in the $2.5 billion share sale of the flagship firm Adani Enterprises (ADEL.NS), which concluded on Tuesday. On Wednesday, a day after the share sale closed, Adani Enterprises (ADEL.NS) plunged 28%, bringing its losses since the Hindenburg report to more than $18 billion.

The secondary share sale of flagship Adani Enterprises (ADEL.NS) was subscribed 93% on Tuesday, including the anchor investor portion, Indian stock exchange data showed. The share sale needed at least 90% subscription to go through. By Monday, the book building process of the country's largest share sale had received only 3% in bids, amid swirling concerns that the share sale could struggle due to a market rout in Adani's stocks in recent days. That has since sparked $65 billion in cumulative losses for stocks of the Adani group, which called the report baseless. The support for Adani's share sale came even as the flagship's shares were trading at 2,967 rupees, up nearly 2.5% but below the lower end of the share sale price band of 3,112 rupees.

The conglomerate led by Asia's richest man, the Indian billionaire Gautam Adani, said last week's Hindenburg report was intended to enable the U.S.-based short seller to book gains, without citing evidence. This has been overshadowed by the Hindenburg report, which flagged concerns about high debt levels and the use of tax havens. Hindenburg did not immediately respond to a request for comment on the Adani response on Sunday. The report also said five of seven key listed Adani companies have reported current ratios - a measure of liquid assets minus near-term liabilities - of below 1. It also said key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing" and that shares in seven Adani listed companies have an 85% downside on a fundamental basis due to what it called "sky-high valuations".

Asked for comment, an Adani Group spokesperson said in an email that the share sale was going "as per schedule", without elaborating. The Adani Group has called the report baseless and said it was considering taking action against Hindenburg. Friday's 20% fall in shares of group flagship Adani Enterprises dragged it 11% below the minimum offer price of the secondary sale. Adani had set a floor price of 3,112 rupees ($38.22) a share and a cap of 3,276 rupees, but Adani Enterprises closed on Friday 2,761.45 rupees. A fourth source said Adani management is also discussing the share sale internally to decide on next steps.

[1/2] The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad, India, January 27, 2023. Adani Group in a statement said: "There is no change in either the schedule or the issue price." The Adani Group has called the report baseless and said it was considering taking action against Hindenburg. Friday's 20% fall in shares of group flagship Adani Enterprises dragged it 11% below the minimum offer price of the secondary sale. The Hindenburg report questioned how the Adani Group used entities in offshore tax havens such as Mauritius and the Caribbean islands.

☆ India market regulator increases scrutiny of Adani group - sources
▼ + stars: | 2023-01-27 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +3 min

Email queries and phone calls sent to Adani Group were not answered. Adani earlier this week dismissed the Hindenburg report as baseless and said it is considering whether to take legal action against the New York-based firm. The regulator had sought clarity from the group on these entities when the group approached it for regulatory clearance last year. Hindenburg's report on the Adani group comes amid a $2.45 billion secondary share sale by the group's flagship company Adani Enterprises. Some issues raised in the Hindenburg report point to concerns similar to what the regulator had regarding movement of funds between parties related to the Adani Group through offshore funds back into local companies, sources said.

☆ India court quashes write-off of Yes Bank's AT1 bonds -legal sources
▼ + stars: | 2023-01-20 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +1 min

MUMBAI, Jan 20 (Reuters) - The Bombay High Court, in an oral pronouncement on Friday, quashed the write-off of additional Tier-1 (AT1) bonds issued by Yes Bank Ltd (YESB.NS), said legal sources with direct knowledge of the matter. The final order is yet to be uploaded on the court website and the bank can choose to appeal in Supreme Court. The bonds were written off as part of a restructuring plan to rescue Yes Bank in March 2020. This feature was invoked in the case of Yes Bank. "The Court has granted Yes Bank 6 weeks to implement the order," said Sinha.

☆ Exclusive: India regulator probes investments between Nippon Mutual Fund, Yes Bank, sources say
▼ + stars: | 2023-01-19 | by ( Jayshree Pyasi | ) www.reuters.com time to read: +4 min

MUMBAI, Jan 19 (Reuters) - An Indian regulator is investigating investments between Nippon India Mutual Fund, the largest foreign-owned fund in the country, and Yes Bank between 2016 and 2019 for suspected misuse of investors' money, sources said. SEBI's regulations say that the parent of a mutual fund cannot access investors' money either directly or indirectly. The current owner of the fund, Nippon India, as well as the previous owner could be liable, the sources said. As of December 2022, Nippon India was the fourth-largest mutual fund in India with assets under management of 2.9 trillion rupees ($35.46 billion) as well as the biggest foreign-owned mutual fund. On Friday, SEBI proposed further tightening of mutual fund regulations asking mutual fund owners to reduce their stake gradually as a measure to check their influence on investment decisions.

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