Adani Group companies are still eligible for inclusion in JPMorgan’s influential bond indexes, it said in a note. The note comes after Credit Suisse, Citigroup and Standard Chartered stated over days that they will stop accepting Adani bonds as collateral for margin loans.
The conglomerate has a total notional value of $7.7 billion in JPMorgan’s Corporate Emerging Market Bond Index (CEMBI) and Asia Credit Index (JACI) indexes, the lender said on Monday. CEMBI tracks dollar debt issued by emerging market corporations, while JACI tracks total return performance of the Asia fixed-rate dollar bond market.
Adani dollar bonds remain eligible to be part of JPMorgan’s ESG Global Corporate Index (JESG), an integrated environmental, social, and governance corporate benchmark covering investment grade and high-yield markets.
“We continue to monitor publicly available information and liquidity of the securities, and in case of market disruption or confirmed default event,” JPMorgan said in its note.
Adani Group dollar bonds and shares have been under immense pressure following Hindenburg Research’s damning report that accused the conglomerate of stock manipulation, accounting fraud and other malpractices. The group’s market value dipped around $110 billion following the report.
Even though Adani issued a 413-page response and withdrew its fully-subscribed Rs 20,000 crore follow-on public offer, the shares continued to dip.
In this backdrop, Adani’s weight decreased by 10 basis points to 36 basis points in CEMBI Broad Div and by 15 basis points to 48 basis points in the CEMBI Broad Div IG index, JPMorgan said. Its weight decreased by 16 basis points to 52 basis points in JACI, the lender added.
(With Reuters input)