Axis Bank, India’s fourth-biggest private lender, joined top-deck state-run peers in defending its financial exposure to the Adani Group, which has lost more than $110 billion in market capitalisation since a US short seller’s report alleging ‘fraud’ and ‘price manipulation’ came to light late last month.
Axis Bank said there is no risk of default and that all its debt exposure is to cash-generating assets and operating companies. The loans amount to less than 1% of the lender’s total advances, Axis Bank said. Earlier, the State Bank of India and Bank of Baroda, too, defended their Adani Group exposures.
“We extend credit, basis comfort on cash flow, security, and repayment capability of obligors as per the Bank’s credit assessment framework,” the lender said in an exchange filing on Saturday. “We remain comfortable with our exposure to Adani Group basis the same.
Our exposure to Adani Group is primarily to the operating companies in the Ports, Transmission, Power, Gas Distribution, Roads, and Airports.”
According to the filing, the lender’s total exposure to the Adani Group is 0.94% of its net advances. Several banks have issued clarifications regarding their exposure to the Adani Group.
They have been able to meet their obligations. The bank’s exposure is around 0.88% of the total loan book,” Dinesh Khara, chairman of SBI, said last Friday.
Bank of Baroda has said that it has a total exposure of Rs 5,380 crore to the group “It (exposure) is also spread over a large number of companies,” Sanjiv Chadha,CEO of Bank of Baroda had said. “However, as a percentage of our balance sheet, this exposure has come down over the past three years.