Adani-Hindenburg saga rekindles worries over PNBs tryst with bad loans but MD Goel unfazed
Hindenburg research report on Adani: PNB MD assures that the bank is not concerned with these allegations as the conglomerate has loans mostly backed by cash flows.
Punjab National Bank (PNB) is not concerned by the ongoing tussle involving the Adani group and Hindenburg Research as the bank has an exposure of just Rs 7000 crore to the Adani conglomerate, said bank's MD Atul Kumar Goel said in a press conference.
While the bank has stabilized on the front of non-performing assets in the last couple of quarters, it is yet to recover from the severe blow of the willful default by fugitive diamantaires Nirav Modi and Mehul Choksi. At such a juncture, uncertainties hovering over the Adani group are worrying bank analysts, and the question arises, “Is PNB heading towards other willful defaults?”
MD Goel clarifies while addressing the press conference after the quarterly results, saying, “We don’t have much to worry about the reports, as Adani group has just around Rs 7000 crore loans (from PNB), out of which Rs 2000 crore is assigned for their airport projects. Moreover, the majority of the amount is backed by cash flow.”
A recent report by Hindenburg Research levied serious allegations upon the Adani Group and claimed that the conglomerate is "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades". The share price of the company plunged after the report came out.
Although, the Adani group has discarded all such allegations and also said that they will take legal action against the research firm.
In a recent interaction with Zee Business, Madhusudan Kela, founder of MK Ventures, also said, “I find the timing of the report to be suspicious. The question that arises here is — why was such a report revealed right before the release of the FPO and just three days before the budget?”
The gross non-performing assets (NPAs) of the banks as a percentage of total loans came in at 9.76 per cent for the quarter that ended December 2022, as against 10.48 per cent for the previous three months and 12.88 per cent for the quarter that ended December 2021.
Hindenburg report has alleged that Adani is camouflaging his fraudulent activities in the name of nationalism.
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