The Reserve Bank of India (RBI) has asked banks to share the details of the loans sanctioned by them to the Adani Group of companies, their outstanding exposure, and the security structure in the backdrop of group companies’ stocks and bonds getting battered over the last few days and Adani Enterprises withdrawing its fully subscribed ₹20,000-crore follow-on public offer.

Securities (shares and bonds) of Adani Group companies are facing the heat in the wake of adverse observations made by Hindenburg Research regarding the accounting practices, related-party transactions, and concentrated share ownership by a few overseas investments firms.

The Adani Group has rejected short-seller Hindenburg’s document as a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive.

Also read: No impact of Adani issue on domestic Power sector: RK Singh

Bankers said the RBI may be wanting to assess the systemic implications of the aforementioned developments on banks.

They emphasised that existing companies of the group have enough cashflows to service the loans taken from banks. However, in the case of new projects taken up by the group, if the promoter’s equity portion doesn’t come through, banks could re-look at the sanctions.

Bankers underscored that Indian banks’ financing to the Adani Group companies is against hypothecation or mortgage of assets. However, foreign banks have financed group companies’ acquisitions via pledge of shares, which are subject to volatility.

Referring to refinancing of overseas bonds, which will come up for redemption, the group may have to closely examine the pricing and availability of funds, they said. 

Also read: Adani Group’s developments being monitored by ICRA

“RBI prescribed group exposure limits may make it difficult for Indian banks’ to refinance the overseas bonds,” said a banker.

CLSA, in a recent report, said the Indian banking sector’s exposure to the Group is less than 40 per cent of total group debt.

Analysts with the institutional brokerage and investment group, in a report, estimated that on an absolute level, exposure of banks to top-5 Adani group companies — Adani Enterprises, Adani Ports, Adani Power, Adani Green, and Adani Transmission — is ₹70,000-80,000 crore of the group’s consolidated debt of ₹2-lakh crore in FY22.

Also read: Adani Enterprises calls off ₹20,000-crore FPO

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