To Pacify Stakeholders, Top Banks Declare Their Exposure To Adani Group

The Adani Group has been in deep trouble since the US-based short seller Hindenburg Research released a report pointing out irregularities in the conglomerate's books and accused it of manipulating accounts on January 24. Since the release of the report, Adani Group firms have lost $110 billion in value. Gautam Adani's own wealth has been halved to a little more than $61 billion and he has slipped out of the ranking of the world's top 10 richest people.

Centre's officials and representatives of the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) have issued statements to pacify the stakeholders. Major lenders to the Adani Group too, have reiterated their faith in their business and their financial wealth.

In an earlier interview with Network18, Union Finance Minister Nirmala Sitharaman said that the exposure of the Life Insurance Corporation of India (LIC) is "well within" the permissible limits. In a post-budget press conference in Mumbai on February 4, she said that the regulators are working and monitoring the Adani Group situation closely.

The RBI too, on Friday said that the banking sector “remains resilient and stable” based on its latest assessment and pledged to continue to monitor the situation.

Investors and the public at large are, however, apprehensive about the future of the group. Questions have been put to public lenders about their exposures to the group. The lenders include big names like the State Bank of India (SBI), Bank of Baroda (BoB), the Punjab National Bank (PNB), Axis Bank, and IndusInd Bank. All have come out in public with their numbers to restore confidence and calm the stakeholders.

SBI

India's largest public lender, SBI, said that its total exposure to the Adani Group is Rs 27,000 crore. It amounts to 0.8 per cent of its overall loan book. Dinesh Khara, chairman of the bank said that there are no challenges concerning the conglomerates' debt servicing abilities.

BoB

BoB's exposure to the Adani Group does not rank among the bank's top 10 exposures, the banks's CEO and MD Sanjiv Chadha said. Around 30 per cent of the bank's exposure is backed by joint ventures with PSU companies, he added.

PNB

PNB MD and CEO Atul Kumar Goel said that the lender's total exposure to the group is around Rs 7,000 crore, of which Rs 6,300 crore is funded exposure. Goel said that PNB has an exposure of Rs 2,500 crore for the group's airport business.

Axis Bank

One of the largest private sector lenders, Axis Bank, in a statement to the exchanges said that its total outstanding loans as a percentage of net advances to Adani Group companies stood at only 0.94 per cent as of December 2022.

The lender further said that its fund-based outstanding as a percentage of net advances was 0.29 per cent, non-fund based outstanding as a percentage of net advances was 0.58 per cent, and its investments as a percentage of net advances was 0.07 per cent, according to a report published by moneycontrol.

IndusInd Bank

IndusInd Bank stated on February 1 that its total loan outstanding towards the Adani Group was 0.49 percent of its loan book. The lender clarified that its total non-fund outstanding was 0.85 per cent, whereas its loan outstanding against fixed deposits is 0.2 per cent of the loan book, as stated in a report by moneycontrol.