Research firm CreditSights on Tuesday said that it does not see the loan exposure to Adani Group stocks as an issue for the State Bank of India (SBI) given its strong general provision reserves buffer.
SBI’s total loan exposure to the Adani Group was disclosed to be 0.88% of total loans, as of end-Q3FY23. “SBI’s loan exposure to Adani as of end-Q3FY23, most secured against cash-generating assets, no loans against shares provided to group,” the firm said.
Three leading public sector banks have already disclosed their exposure to the Adani Group. The country’s largest lender State Bank of India (SBI) has an exposure of Rs 27,000 crore, while that of the second biggest Punjab National Bank (PNB) is at Rs 7,000 crore.
CreditSights, a research firm, shares the same parent company as Fitch Ratings. CreditSights in September had put the spotlight on the group’s “elevated” leverage and lawmakers have sought an investigation into some of the group’s investors. While the report later corrected some calculation errors, CreditSights said it maintained concerns over leverage.
A bombshell report from US investment firm Hindenburg Research claimed the conglomerate had engaged in a “brazen stock manipulation and accounting fraud scheme over the course of decades”.
Hindenburg said a pattern of “government leniency towards the group” stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge its conduct “for fear of reprisal”.
Adani Group has lost upwards of $45 billion in market cap since the report’s release, and its legal chief announced Thursday that it was exploring punitive action against Hindenburg in US and Indian courts.
The Opposition has been stalling Parliament for the past two days demanding a Joint Parliamentary Committee or a Supreme Court-monitored probe into the affairs of the group. They alleged that the drastic fall in Adani Group shares on Indian exchanges has put public money in danger as public sector LIC and SBI have invested in those companies.
The Congress has alleged that the LIC and SBI have been “forced” to invest in the Adani Group.
Meanwhile, Moody’s Investors Service on Friday said it is assessing overall financial flexibility, including liquidity position, of Adani Group firms.