RBI asks banks for details of Adani Group exposure

Adani Group’s market losses swells to more than $100 billion, a day after its flagship company abandoned a $2.5-billion stock offering

RBI asks banks for details of Adani Group exposure

On Wednesday, Swiss lender Credit Suisse stopped accepting bonds by Adani Group companies as collaterals for margin lending. Pic/ANI

The Reserve Bank of India (RBI) has sought details about lenders’ exposures to the Adani Group, banking sources said, a day after the conglomerate withdrew the Rs 20,000-crore ($2.5 billion) follow-on public offer (FPO) of its flagship firm Adani Enterprises.

On Wednesday, Swiss lender Credit Suisse stopped accepting bonds by Adani Group companies as collaterals for margin lending. On Thursday, Adani Group’s market losses swelled to more than $100 billion, sparking worries about their potential systemic impact.

The going has been tough for the diversified conglomerate over the past week ever since US-based short seller Hindenburg Research levelled a slew of allegations about the group’s operations, calling it the biggest corporate con ever. The Ahmedabad-headquartered group has denied all the allegations but failed to convince analysts and investors.

Also Read: US short seller alleges ‘brazen’ fraud by Adani

There has been selling pressure in banks’ stocks since the Hindenberg Research’s report released on January 24, as investors are concerned about the impact of the crisis on banks’ books.

SBI had said its exposure to Adani Group is fully secured by cash generating assets. Bank of Baroda has said its exposure of Rs 7,000 crore is also fully secured.

Life Insurance Corporation (LIC) has disclosed of having an exposure of Rs 36,474.78 crore to Adani group’s debt and equity, and added that the amount is less than one per cent of its total investments.

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