The country's largest public lender State Bank of India has given loans of as much as 21,000 crore $2.6 billion to Adani Group firms, according to a report on Thursday. According to Bloomberg a source, this is half of what is allowed under rules.
The report said that SBI's exposure includes $200 million from its overseas units. Dinesh Kumar Khara, chairman of SBI, said earlier on Thursday that the companies of the tumult-hit Adani Group were servicing the loans and he doesn't see an immediate challenge to whatever the bank has lent so far.
SBI's scrip on the BSE was nearly flat on Thursday, at Rs 527.75.
The combined market value of Adani Group firms lost over $100 billion in the past week due to a scathing report from US-based short seller firm Hindenburg Research.
Hindenburg Research holds short positions in Adani Group companies through US-traded bonds and non-Indian derivative instruments.
The report states that the seven listed companies of the Adani group have an 85% downside on a fundamental basis due to sky-high valuations.
Adani companies have taken on large debt, including pledging shares of their inflated stock for loans, putting the whole group on a precarious financial footing, Hindenburg said.
Earlier on Thursday, Reuters reported that Reserve Bank of India has asked PSU banks for details about their exposure to the Adani Group of companies.
Information being sought by the RBI includes details of collateral being used to back loans and any indirect exposure banks may have, according to sources.
Adani exposure is nothing alarming and we don't have any concerns as of now, Khara told Reuters last week. Adani Group hasn't raised any funds from the bank.
Societe Generale said that the Indian banking sector's direct exposure to the Adani group was just 0.6%. It said markets are overpricing the risk to Indian banks of exposure to the Adani Group and that a selloff in banking shares seems overdone.
Adani group shares fell after it abandoned its flagship company's $2.5 billion stock offering, sluggishing the conglomerate's market losses to more than $100 billion and sparking concerns about the potential systemic impact.
Adani Enterprises fell nearly 20% on Thursday after trading at its lowest since March 2022, trading at its lowest level since March 2022. Adani Ports and Special Economic Zone were down 5%, while Adani Total Gas, Adani Green Energy and Adani Transmission lost 10% each.
The Nifty Bank index has lost 5.4% since the New York-based short-seller released its report.
The state-owned lender said on Monday that Punjab National Bank has a total exposure of Rs 7,000 crore to Adani Group, but there is no worry pertaining to those accounts.
Around 7,000 crore of the company's debt is related to Adani's airport business, PNB CEO Atul Kumar Goel told reporters at a virtual press conference after the company's quarterly results.
Cash flow is backed by the exposure we are having. The bank is keeping a close eye on the developments pertaining to the news flow around Hindenburg's research report, Goel said.