That would damage public perception of the current Indian government, so the administration will do everything to keep the CA afloat.

Previously such incidents have lead to the CA business cessation by the involved entities (e.g. Diginotar case). I dont see how it would be different in this case.

I hadn't heard of the CA before and had to look it up. They're a publicly listed company in India. Markets will price this in.

https://www.nseindia.com/get-quote/equity/EMUDHRA/eMudhra-Li...

they will have to file an incident report, which will be heavily scrutinized, and can possibly (edit: i am leaning towards likely, as more information comes to light) result in their ejection from most/all root stores.