Reserve Bank Asks Banks For Details Of Exposure To Adani Group Companies: Reports

According to the report, shares in Adani Group of companies plunged on Thursday after the conglomerate, led by tycoon Gautam Adani, shelved a $2.5 billion share sale amid a turbulent market

Information being sought by the RBI includes details of collateral being used to back loans and any indirect exposure banks may have, one of the sources said.

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The Reserve Bank of India (RBI) has asked local banks for details of their exposure to Adani Group of companies, quoting some government and banking sources news agency Reuters reported on Thursday. The RBI, however, did not immediately respond to Reuters request for comment. The sources declined to be identified because they were not authorised to speak to the media.

According to the report, shares in Adani Group of companies plunged on Thursday after the conglomerate, led by tycoon Gautam Adani, shelved a $2.5 billion share sale amid a turbulent market, citing the need to insulate investors from potential losses.

Information being sought by the RBI includes details of collateral being used to back loans and any indirect exposure banks may have, one of the sources said. Nifty Bank index has lost 5.4 per cent since the New York-based short-seller released its report. The broader Nifty index (.NSEI) shed up to 2.8 per cent over the period.

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

According to a report by Moneycontrol, Adani Group companies have seen shares plummeting following a recent research report by a short-seller which followed the cancellation of group's Rs 20,000 crore follow on share sale.

Gautam Adani said that decision to withdraw the offering was considered after volatility seen in market and that “the board felt that it would not have been morally correct to proceed with FPO”.

The comapny's decision to withdraw the FPO came amid the ongoing row over the Hindenburg Reasearch that has accused the Adani Group of using tax havens and flagged debt concerns in a report.

CLSA in a report said bank debt that include term loans, working capital and other facilities form just 38 per cent of the total debt. Also, bonds/commercial papers constitute 37 per cent, 11 per cent is borrowing from financial institutions and the remaining 12-13 per cent is inter-group lending, the report said.