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MSCI will reduce the foreign inclusion factor (FIF) for Adani Total Gas and Adani Transmission during index review exercise later this month, citing free float at 14% and 10%, respectively. The FIF for ACC, Ambuja Cements, Adani Enterprises, Adani Green Energy, Adani Ports and SEZ, and Adani Power will remain the same. This move was initially set for February 2023 index review but was changed following the Hindenburg Research report accusing the Adani Group of indulging in stock price manipulation through shell companies.

The recent collapse of three major US banks suggests that the financial sector may be facing a deeper crisis than anticipated. Valuation expert Aswath Damodaran believes that more US banks are at risk, particularly those that have grown significantly in recent years. Unlike the 2008 financial crisis, this collapse was triggered by searching for high growth and ignoring basic principles, which resulted in a major asset-liability mismatch. Damodaran predicts that the crisis will accelerate consolidation, but maintaining profitability will be challenging for banks, leading to drops in profits. The crisis also highlights the need for regulatory changes to address issues such as duration mismatches and high concentration of deposits.

The government-led deal fueled optimism that the worst of the banking sector turmoil might be over, prompting a recovery in risky assets. The dollar index topped 102 levels after the ISM Manufacturing PMI in the US rose to 47.1 in April 2023, along with signs of elevated price pressures, as input costs rebounded in April.

In March, the group got a lifeline of Rs 15,000 crore from global investment firm GQG Partners, which picked up stakes in 4 Adani Group companies. This further soothed Dalal Street investors and brought in some stability in the stocks.

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The consolidated total revenue for the fourth quarter was Rs 10,795 crore as compared to Rs 13,308 crore in the corresponding previous quarter.

The Stock prices reflect expectations for future financial performance. Thus, as an investor, it becomes very important to anticipate revisions in those expectations. Banking Index has performed well, but it is now the past and thus what lies ahead is the big question.

A rise in political polarisation, divided government since November 2022 congressional elections and more elevated federal deficits over the forthcoming years are the other reasons Scope cited for the ratings review.

Demand for business loans has skyrocketed with a healthy credit cycle, while demand for mortgages has seen some transfer. Diversified lenders such as BAF, Poonawalla, LTFH, and non-vehicle segments are expected to show healthy results. HDFC Bank, ICICI Bank, Tata Capital, Yes Bank, Faircent, L&T Finance and AB Capital have adopted an aggressive stance to grow their loan book across product segments. Commission payouts offered by different lenders for a particular product are not significantly different. Rural areas in Rajasthan have a history of lower delinquencies. Poonawalla Fincorp and Bajaj Finance have been deemed as a buy with potential for increase in value.