The Reserve Bank of India (RBI) has stepped in to take stock of commercial banks’ exposure to the Adani group after the shares of the firms in the conglomerate fell sharply following US-based short-seller Hindenburg Research’s report accusing it of stock manipulation and accounting fraud.
According to bankers, on Wednesday the regulator asked lenders to furnish the details of the loans sanctioned and those outstanding to the Adani group as on January 31.
“We submitted the details on Wednesday itself,” said an official of a large bank.
Last week, rating agencies sought similar details from commercial banks.
The exposure of State Bank of India, the country’s largest lender, to the group is $2.6 billion, or Rs 21,000 crore, including $200 million from its overseas branches, a Bloomberg report said, quoting unnamed sources. SBI had earlier said its exposure was much below the Large Exposure Framework limit of the RBI. Punjab National Bank, another large state-owned lender, has an exposure of Rs 7,000 crore.
Late Wednesday evening, the group cancelled its follow-on public offer even though the share sale to raise Rs 20,000 crore was fully subscribed.
Despite that, the rout in shares continued unabated, resulting in the loss in market capitalisation exceeding $100 billion on Thursday.
According to broking firm CLSA, the consolidated debt of the top five Adani group companies (Adani Enterprises, Adani Ports, Adani Power, Adani Green, and Adani Transmission) is Rs 2.1 trillion, and, excluding inter-group lending, the debt is Rs 1.9 trillion.
“Bank debt (term loans, working capital and other facilities) forms just 38 per cent of the total debt … On an absolute level, we estimate that bank debt is Rs 700-800 billion of the Rs 2 trillion debt in FY22,” the CLSA note said.
CLSA said the ballpark exposure of private banks to the group was 0.3 per cent of the FY24 loans and 1.5 per cent of the FY24 net worth.
“For PSU banks, the exposure is 0.7 per cent of FY24 loans and 6 per cent of FY24 networth.”
In a communication to the exchanges, IDFC First Bank said its funded outstanding was 0.06 per cent of the funded assets as of December 2022 and the working capital (non-funded) outstanding was only 0.51 per cent of the funded assets as of December 31, 2022. Of this the majority, at 0.38 per cent, is secured letter of credit, which will mature in the next two-five months.
“The Bank has been receiving payments as per the quarterly amortizing payment schedule for the same,” IFDC First Bank said, adding it did not have any exposure to offshore entities in the Adani group or against the shares of the group companies.
IndusInd Bank, a private lender, has hinted its outstanding loans are 0.49 per cent of its loan book, without naming Adani.
“It has come to our notice about speculation on the Bank’s exposure towards a conglomerate group. We wish to clarify the Bank’s exposure towards this Group…” IndusInd Bank said in a communication to the exchanges.
The bank’s loan book as on December 31 was Rs 2.73 trillion.
“The total non-fund outstanding towards the Group is at 0.85 per cent of the loan book,” the private bank said, adding the loan outstanding against fixed deposits of the group was 0.20 per cent of the loan book and a majority of the fund and non-fund exposures were working capital requirements and they were secured.