Kotak Mahindra Bank CEO Uday Kotak on Sunday said he does not see any systemic risk to the financial system but it's time to strengthen Indian underwriting and capacity building, amid meltdown in Adani Group shares over corporate governance allegations.

Kotak said large Indian corporates rely more on global sources for debt and equity finance, which creates challenges and vulnerabilities.

“I do not see systemic risk to the Indian financial system from recent events. However, large Indian corporates rely more on global sources for debt and equity finance. This creates challenges and vulnerabilities. Time to further strengthen Indian underwriting and capacity building,” Kotak tweeted.

Amid concerns over banks' exposure to the crisis-ridden Adani Group, the Reserve Bank on February 3 issued a statement saying that India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders.

US-based short-seller Hindenburg Research made a litany of allegations in a January 24 report, including fraudulent transactions and share price manipulation at the Gautam Adani-led group.

Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

The Hindenburg report was released on the day when Adani Enterprises' Rs 20,000-crore follow on public offer (FPO) opened for anchor investors. Though the offer was fully subscribed, Adani Group decided to scrap the FPO.

Following the report, Adani Group stocks are witnessing a meltdown on the bourses and the stock price of Adani Enterprises fell by over 70 per cent from its peak of Rs 4,190 in December, last year.

Since January 24, the BSE Sensex has slumped by over 1,000 points largely driven by sell-off in Adani Group stocks.

In an interview to PTI, Finance Secretary T V Somanathan last week said the stock market turmoil created by rout in Adani Group shares is a "storm in a teacup" from a macroeconomic point of view and that India's public financial system is robust.

Fitch Ratings said there's no immediate impact on the credit profile of the Adani companies it rates following the Hindenburg report and that it doesn't expect material changes to the forecast cash flow.

Its peer Moody's Investors Service warned that the rout in Adani stocks could hurt the conglomerate's ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years.

S&P Global Ratings, however, revised outlook on Adani Ports and Adani Electricity to negative from stable while affirming the rating.

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