Hindenburg Effect: Axis Bank says exposure to Adani Group is nearly 1% of total loans

Private sector lender Axis Bank on Saturday said its exposure to crisis-ridden Adani Group stands at 0.94 per cent of its net advances.

"We extend credit, basis comfort on cash flow, security, and repayment capability of obligors as per the Bank's credit assessment framework. We remain comfortable with our exposure to Adani Group basis the same," the bank said in a regulatory filing.

The exposure to Adani Group is primarily to the operating companies in sectors like ports, transmission, power, gas distribution, roads and airports, it said.

Also Read: SBI's total exposure to Adani Group at Rs 27,000 crore; none against shares: Chairman Dinesh Khara

Fund-based outstanding as percentage of net advances is 0.29 per cent, while that of non-fund based outstanding is 0.58 per cent, it said.

Investments as percentage of net advances of the bank is 0.07 per cent as of December 31, 2022, it added.

In addition, the bank's fund based and non-fund based outstanding towards the group's JVs (with an MNC in the FMCG segment and with a PSU in City Gas Distribution segment) is at 0.02 per cent and 0.25 per cent, respectively, of the net advances.

Also Read: "Storm in a tea cup:" Finance Secretary on the rout in Adani stocks

Further, it said the bank has a resilient balance sheet with standard asset coverage of 1.53 per cent as of December 31, 2022.

Stocks of Adani Group firms have taken a massive beating on the bourses after US-based short-seller Hindenburg Research made a litany of allegations in a report, including fraudulent transactions and share price manipulation at the Gautam Adani-led group.

The group has rejected the allegations.

Hindenburg released the report on January 24 -- the day on which Adani Enterprises' Rs 20,000-crore follow-on share sale opened for anchor investors.

Also Read: NSE, BSE put 3 Adani Group companies under short-term additional surveillance measure

Three leading public sector banks have already disclosed their exposure to the Adani Group. The country's largest lender State Bank of India (SBI) has an exposure of Rs 27,000 crore, while that of the second biggest Punjab National Bank (PNB) is at Rs 7,000 crore.

Another state-owned lender Bank of Baroda has total exposure of Rs 7,000 crore, which is also fully secured.

Government-owned life insurance behemoth Life Insurance Corporation (LIC) has disclosed holdings of Rs 36,474.78 crore in Adani group's debt and equity.

Earlier, the conglomerate withdrew the Rs 20,000-crore follow on public offer (FPO) of its flagship firm Adani Enterprises amid a steep fall in its stock prices.

With PTI Inputs