SBI’s total lending to the Adani Group is less than 1 per cent of net loans at Rs 27,000 crore and is manageable as it is loaned against assets and not for equity, credit research firm CreditSites said in a report.
A report last month by the Hindenburg Financial Research Institute against the Adani Group spooked global investors. The Adani Group claimed to have manipulated the accounts and controlled the share price. Over the next few days, the Adani Group lost over $10,000 crore in market value. After this, attention turned to the companies that had given loans to Adani and the companies that had invested in them. Public sector banks like SBI, Panchal National Bank and others have given loans of several thousand crores of rupees. LIC has also invested thousands of crores of rupees. As a result, their shares also fell in the last week.
Hence, the rumor of vulnerability to these companies was spread. In this regard, the concerned companies are issuing reports and clarifying. In the quarter ended December, SBI’s lending to the Adani Group accounted for 0.88 per cent of total lending, or Rs 27,000 crore. Most of these loans are against liquid assets. It informed the RBI that no loans were given in exchange for shares.
However, credit research firm CreditSites said in its report: SBI has given credit to Adani at a manageable level based on SBI’s provision for bad loans and ability to generate pre-provision profits. A debt of Rs 27,000 crore is equivalent to 34 per cent of 2023’s nine-month profit. Most of the loans are issued against finished and cash generating assets. The rest are projects under construction. The bank also lends to some unfunded projects. But those loans have guarantees from other banks. No debt is related to share acquisition activities. have said.
Last week, SBI chairman Dinesh Khara said the Adani Group had been repaying its loans regularly. “We have given credit to Adani Group projects considering solid assets and adequate cash flows,” he said.
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