Mumbai: State Bank of India (SBI) gave loans worth as much as 2.6 billion dollar to the Adani Group of companies, reported Bloomberg citing a person familiar with the matter.
According to the report, the person said that SBI’s loans to companies in the Adani conglomerate are about half of what is allowed under the rules. SBI’s exposure includes $200 million from its overseas units, the person said.
This comes as on Thursday, SBI chairman Dinesh Kumar Khara said that he doesn’t see loans to Adani group companies as an “immediate challenge”. Khara told Times Network, “Our exposure is to the physical assets and they are having adequate cash generation and we have not experienced in the past any kind of a default from this entity and we don’t expect to have any challenge because the assets are having very robust cashflow.”
Earlier, the Reserve Bank of India (RBI) reportedly asked Banks to provide details of their exposure to the Adani conglomerate.
Following the report from US-based Hindenburg Research, stock prices of companies in the Adani group have plunged. The trend continued on Thursday, as the stock price of Adani Enterprise dropped as much as 20 per cent.
Wealth units of Credit Suisse Group AG and Citigroup Inc. have reportedly stopped accepting securities from the group as collateral for margin loans to their clients.
However, the company has repeatedly denied all allegations in the Hindenburg report.
As per the report, other banks are also confident about their loans to the Adani group. Last month, Punjab National Bank’s chief executive Atul Goel said that Punjab National Bank’s exposure to Adani companies was Rs 70 billion. About a third of it was to Adani’s airport business and cash-flows back the entire advances.
