SBI Loans $2.6B to Adani Group, Here’s the Latest

SBI Q1FY24 Results: Standalone PAT Rises to Rs 18536.80 Cr

“State Bank of India (SBI), India’s largest lender, has reportedly granted loans worth INR 200 crore ($26 billion) to companies in the Adani Group. This constitutes nearly half of the permissible amount under the current lending rules, according to a source close to the matter. SBI’s overseas units have also contributed to the exposure, with a loan of INR 15 crore ($200 million). SBI Chairman, Dinesh Kumar Khara, has stated that the Adani Group companies are servicing their loans and he does not foresee any immediate challenges to the loans extended so far.

The Reserve Bank of India, the nation’s banking regulator, has asked lenders for information regarding their exposure to the Adani Group, following a sharp decline in the group’s stock prices. SBI did not respond to requests for comment on its exposure.

Adani Group’s exposure to various financiers has come under closer scrutiny after the group’s shares plummeted, following a negative report from Hindenburg Research in the US. As a result, wealth management units of Credit Suisse and Citigroup have ceased accepting securities from the Adani Group as collateral for margin loans to their clients.

Adani has rejected the allegations in the report and has threatened legal action. Other domestic banks, such as Punjab National Bank and IndusInd Bank, have expressed confidence in the Indian conglomerate’s ability to service its loans.

Punjab National Bank CEO, Atul Goel, has confirmed the bank’s exposure to the Adani Group, which stands at INR 70 billion. A third of this exposure is to Adani’s airport business, which generates enough cash flow to repay the entire loan. Meanwhile, IDFC First Bank has stated in an exchange filing that its exposure to the Adani Group is less than 0.1% of its total loans. IndusInd Bank, with a loan book of INR 29 trillion, has confirmed that its exposure to the Adani Group accounts for 0.5% of its loan book.”

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