(Bloomberg) -- Indian policy makers and regulators stepped in over the weekend to calm frayed nerves over concerns the turmoil surrounding billionaire Gautam Adani’s conglomerate would spill over into the local economy and affect global investor sentiment toward the country.

While Prime Minister Narendra Modi has yet to comment publicly on the saga, officials from his administration said Indian regulators were independent and competent to deal with the fallout. The Securities and Exchange Board of India said it was committed to ensure market integrity. The central bank has assured that banks are within limits on their exposure to the Adani group.

The market value of Adani’s empire has slumped by almost half since the release of a scathing report by US-based short-seller Hindenburg Research on Jan. 24, accusing it of stock manipulation and accounting fraud. The group has repeatedly denied Hindenburg’s allegations of corporate wrongdoing and threatened legal action.

The tumult has become a national issue, with lawmakers disrupting parliament to demand answers as Adani’s interests often intertwine with the India’s growth plans. The main opposition party ramped up the pressure on Modi over his silence and planned a nationwide protest on Monday to highlight the risk to small investors.

Most Adani Group dollar bonds rose Monday, with Adani Green Energy Ltd.’s 2024 $750 million note leading the advance, climbing 1.2 cents on the dollar to 72.4 cents as of 10:02 a.m. in Hong Kong. Moves Monday add to gains last week for several of the group’s debt securities, but prices for the notes are still down by about 8 cents to 23 cents on the dollar since Hindenburg Research’s initial report.

Bankers and industrialists also shared their view on the impact on India. Asia’s wealthiest financier Uday Kotak said while he doesn’t see systemic risks to India’s financial system from “recent events,” the country’s large corporates rely on global sources for debt and equity financing, and local underwriting and capacity building needs to improve. 

Billionaire businessman Anand Mahindra said “never, ever bet against India” amid questions if current challenges in the business sector will trip the nation’s ambitions to be a global economic force.

As the saga enters its third week, investors are bracing for further volatility and the focus is increasingly turning to how Adani Group will manage to finance its debt obligations. 

The rout in company shares has cost India its place among the world’s five biggest stock markets, while the rupee is the worst performing emerging Asian currency this year. Foreigners have pulled out $3.8 billion from the nation’s equities in 2023, the most among emerging Asian markets.

New Delhi is rushing to limit the blow. 

Indian regulators “will do their job” in dealing with the allegations against the Adani Group, Finance Minister Nirmala Sitharaman said Saturday. The recent market turbulence won’t impact the nation’s economic fundamentals, she said. Trade Minister Piyush Goyal echoed similar sentiment, saying Indian financial markets were among the most-respected and well-regulated in the world.

Concerns over how the Adani Group will manage its various debt obligations have increased after Adani Enterprises Ltd. pulled the plug on a record $2.5 billion follow-on share sale, citing the need to protect its investors’ interests.

It has also shelved a plan to raise as much as 10 billion rupees ($122 million) via its first-ever public sale of bonds, Bloomberg News reported on Saturday, citing people familiar with the matter. 

S&P Global Ratings cut its outlook on Adani Ports and SEZ Ltd. and Adani Electricity Mumbai Ltd. to negative. “There is a risk that investor concerns about the group’s governance disclosures are larger than what we have currently factored into ratings,” the ratings company said in a statement.

There are also risks that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for rated entities, it said.

--With assistance from Anup Roy, Adrija Chatterjee and Harry Suhartono.

(Updates with Adani bond price moves.)

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