SBI's loan exposure to Adani Group at Rs 21,000 crore

According to a report by Bloomberg, India’s largest public lender SBI has given loans of $2.6 billion (21,000 crore) to Adani Group companies.  This amount is half the maximum exposure that SBI can have to a single group under prevailing RBI rules.

This exposure of SBI also includes $200 million from its overseas units, the report said.

Earlier on Thursday, Dinesh Kumar Khara, chairman of SBI said, the tumult-hit Adani Group companies were servicing the loans and he doesn’t see an “immediate challenge” to whatever the bank has lent so far. 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 this week, RBI has asked banks to provide the details of loans provided to Adani conglomerate.

The Indian banking sector's direct exposure to the Adani group was just 0.6%, Societe Generale said in a report on Wednesday. It said markets are 'overpricing' the risk to Indian lenders of their exposure to the Adani Group and that a sell-off in banking shares seemed overdone.

Adani companies’ shares falls on Thursday after it calls off its flagship company's $2.5-billion stock offering, swelling the conglomerate's market losses to more than $100 billion and sparking worries about the potential systemic impact.

The shares of Adani Enterprises plunged nearly 20% on Thursday, trading at its lowest since March 2022. Other group companies including Adani Ports and Special Economic Zone was down 5%, while Adani Total Gas, Adani Green Energy and Adani Transmission lost 10% each due to pressure.

Nifty Bank index has also lost around 5.4% after short-seller Hindenburg Research released its report.

Last month, PNB’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.

For feedback and suggestions, write to us at editorial@iifl.com