Banks Clarify Exposure To Adani Group Companies
Exposure to Adani Group companies is backed by cashflows, bankers said.
Adani Enterprises Transfers Back FPO Funds to International Holding Company
In a filing to Abu Dhabi Securities Exchange, IHC confirmed that the funds invested in Adani Enterprises' Rs 20,000-crore FPO was returned to its bank account
IHC said it was duly informed about the Adani Enterprises' decision to roll back the fully-subscribed offer.
Punjab National Bank Has A Rs 7,000-Crore Exposure To Adani Group, Keeping Watch: MD Goel
PNB's funded exposure stands at Rs 6,300 crore, non-funded at Rs 700 crore, MD and CEO AK Goel had said in a recent interaction.
Exposure toward Adani Group's airport business is at Rs 2,500 crore, he had said.
"All exposures are backed by cash flows, no exposure against shares. We have no worries as on date with regard to our exposure to the group," Goel assured. "We will be keeping watch on all developments."
Source: PNB press briefing
State Banks, LIC Exposure To Adani Companies Is Very Low: Finance Secretary
India says state banks, LIC exposure to Adani companies is very low, Bloomberg said citing Finance Secretary TV Somanathan.
India sees no contagion risk from Adani crisis
Adani issue doesn't affect India's macroeconomy.
Source: Bloomberg
Most Adani Group Stocks Down
Most of the Adani Group stocks extended losses on Thursday, with flagship Adani Enterprises leading the laggards.
Only Ambuja Cements was trading higher.
Source: Bloomberg
Shares Of SBI Decline, IDFC Gains
The shares of State Bank Of India were trading 1.36% lower at Rs 520.2 apiece.
Meanwhile, IDFC First Bank shares traded 3.36% higher.
Exposure to the Adani Group companies has not created any credit quality concerns as all the group companies are generating strong cash flows, according to bankers.
Shares of Adani Group's companies remained volatile after the group withdrew the follow-on public offer of Adani Enterprises even after it was fully subscribed. Gautam Adani, billionaire chairman of the group, said the the decision was taken to "insulate the investors from potential losses".
Shares of the group flagship have fallen below the offer price amid volatility stemming from the Hindenburg Research report that alleged "stock manipulation and fraud". The group has called the report a "malicious combination of selective misinformation and stale, baseless, and discredited allegations that have been tested and rejected by India’s highest courts".
Here's what banks have to say about their exposure to the Adani Group companies:
State Bank of India
Movements in the equity market have no impact on credit quality, a State Bank of India official told BQ Prime.
"SBI exposure is backed by cashflows, and we have good visibility on the future cash flows," the official said on the condition of anonymity. All Adani Group assets are generating strong cash flow, the official said.
While the follow-on public offering event might impact future projects, it has no immediate impact on the bank, the official said.
The regulator has sought details in the normal course of business.
IDFC First Bank
IDFC First Bank Ltd. said it is comfortable with its exposure to Adani Group.
"The underlying companies have strong cash flows and an attractive operating model, and we are comfortable with the exposure," it said in an exchange filing.
The funded outstanding was 0.06% of the funded assets as of December 2022, the lender said.
The non-funded outstanding stood at 0.51% of the funded assets.
IDFC First Bank said it has been receiving payments as per the quarterly amortising schedule. It does not have any exposure to any offshore entities in the Adani Group or against the shares of Adani Group companies, the lender said.
The bank said it continues to bring down exposure for the top 10 group borrowers.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.