Indian banks have extended loans of almost 80,000 crore to Adani Group after a report by US-based investment research firm Hindenburg Research said that the group was engaged in a brazen stock manipulation and accounting fraud scheme. Over the weekend, investors have been asking questions about exposure. A large public sector bank official said we have compiled the data on our loan exposure and other investments and shared the details with them.
According to bank officials, international rating agencies have asked for information on their exposure to Bankers, and that there is no reason for immediate worry, even though they are monitoring the situation.
According to a report by the CLSA, Indian has around 80,000 crore exposure to Adani Group, which is 38 per cent of the group's total debt.
The Punjab National Bank said on Monday that it has exposure of 7,000 crore to the group. The total exposure includes an investment of Rs 42 crore and the bank is keeping a close watch on the situation, said the Managing Director and Chief Executive Officer Atul Kumar Goel, who said the total exposure includes an investment of Rs 42 crore.
Bankers said investors are worried about banks non-fund exposure to Adani. Some of their non-fund exposure is as much as 40 per cent of total exposure.
CLSA said private exposure of private is 0.3 per cent of the group's 2023 -- 24 FY 24 loans and 1.5 per cent of FY 24 networth.
It added that the exposure for public sector banks is 0.7 per cent of FY 24 loans and 6 per cent of FY 24 networth.
Adani Enterprises, Adani Ports, Adani Power, Adani Green and Adani Transmission have a debt of 2.1 trillion as of 2021 -- 22, according to the report.
Of the total debt of Rs 2.1 trillion, bank debt — term loans, working capital loans, and other facilities — is about 38 per cent of the group's total debt.
JPMorgan said Adani's capital expenditure capex 0 plan needs to be monitored, as it is high.
We note that while the group disclosed debt earnings before interest, tax, depreciation, and amortization metrics look reasonable, the planned capex looks high at $120 billion over the next five to 10 years. The note notes that the financing of the same remains monitorable.
State Bank of India, the country's largest lender, said that its exposure to Adani Group was well below the Reserve Bank of India's norms on the large exposure framework and that all exposures are secured by cash-generating assets.