India's Adani tries to allay concerns as lenders step up scrutiny - sources

India's Adani Group has reached out to banks to try to allay their concerns as some consider tighter credit rules for the embattled conglomerate after a botched $2.5 billion share sale and a massive sell-off in its stocks, several bankers said. Shares of Adani Group companies have lost more than half their market value, or in excess of $100 billion combined, after U.S. short-seller Hindenburg Research raised questions last week about their debt levels and use of tax havens. The ports-to-energy conglomerate, led by Gautam Adani, one of the world's richest men, rejects the criticism and denies wrongdoing. But the market turmoil led its flagship Adani Enterprises to abandon a $2.5 billion secondary share offering on Wednesday, prompting concerns at lenders. Top Adani executives held a call this week with State Bank of India (SBI), which has the highest exposure to the group, to say it wasn't facing any issues with repayments and cash flow, a senior banker with knowledge of the meeting said. India's No. 1 lender, SBI says the bank has about 270 billion rupees ($3.3 billion) in loans to Adani Group. Bank debt forms 38% of the total debt of 2.1 trillion rupees at the top five Adani companies, according to a Jefferies report. Referring to Hindenburg's allegations, another senior SBI banker said the concerns raised had become a "big issue", and would have to be evaluated carefully. SBI will ask questions about the allegations if and when Adani group companies approach the lender for fresh credit, and then take a decision, said the second banker. Both bankers declined to be named due to the sensitivity of the matter. Adani and SBI did not respond to emails requesting comment. SBI chairman Dinesh Khara told a post-earnings press conference on Friday that the bank didn't envisage any challenges from Adani Group, but further financing for its projects would be evaluated on merit. “As far as going forward, each project will be evaluated on its own merit. And also it is a discussion which is vested with the credit committees. So everybody will be very mindful about what the situations are and accordingly decisions are taken,” said Khara. A day after the share offering was pulled, Gautam Adani said the group's cash flow was "very strong" and it would review capital raising once the market stabilised. He said the group had an "impeccable" track record of fulfilling debt obligations. TIGHTER CREDIT CRITERIA Credit rating agency Moody's said on Friday the adverse developments around Adani were likely to reduce its ability to raise capital to "fund committed capex or refinance maturing debt" over the next one to two years. However, it said a portion of Adani's capital expenditure was deferrable, and its rated entities did not have significant maturing debt until fiscal year 2025. Besides SBI, Punjab National Bank, Bank of Baroda and other state-owned and private lenders have exposure to the Adani group of companies, bankers said, though details of loans outstanding at individual lenders are not available. Punjab National Bank and Bank of Baroda did not respond to Reuters requests for comment. Bank of Baroda's CEO Sanjiv Chadha said at a press conference on Friday the bank had "absolutely no concern" on its exposure to Adani. Adani also sent an email to a mid-sized lender this week in which it said Hindenburg's report was done with "malicious intent" and in an attempt to "target the company", said an official at the bank, who has reviewed the mail. The report has no bearing on the debt servicing capacity of the company, the mail said. Despite Adani's message, the Mumbai-headquartered mid-sized lender has decided, after an internal review, to be cautious on approving fresh loans to the group, said the official. Senior executives at six other Indian lenders, with exposure to Adani companies, told Reuters they had also decided to tighten the credit approval process for Adani. India's central bank has asked local banks for details of their exposure to Adani companies, Reuters reported on Thursday, citing government and banking sources. ($1 = 81.8870 Indian rupees) (Reporting by Nupur Anand and Siddhi Nayak; Editing by Sumeet Chatterjee and Mark Potter)

India's Adani tries to allay concerns as lenders step up scrutiny - sources

DISCOVER MORE

Stocks gain anew as small rate hikes loom: Philippines

Abu Dhabi's ADNOC gears up for June listing of marine & logistics unit - sources

Markets reverse after recent gains as bank fears linger

Miners, banks drag London stock lower at open

Local stock market halts gains: Nigeria

Indian shares fall amid banking concerns; IT stocks rebound

UAE's Presight AI to debut on Abu Dhabi Securities Exchange next week

Fed pause before European peers to lift Treasuries, European stocks

GCC central banks track US Fed move; hike key rates by 25bps

Dubai's Meraas to build new residential towers in Design District

VIDEO: LSE-listing will facilitate more funding opportunities for us, Dar Global CEO

Dubai’s Emirates to add value, support Air India – Tim Clark

Abu Dhabi's Mubadala, Ares set up $1bln JV to invest in credit secondaries

Billionaire Ambani adopts familiar playbook in India cola battle vs Coke, Pepsi

Saudi: Arriyadh Development declares lower profits in 2022, dividends proposal

Saudi: SPIMACO shifts to over $45.6mln losses in 2022

Saudi: Tabuk Cement generates 18% higher profits in 2022

Saudi Airlines Catering’s net profits skyrocket 1,729% in 2022

LATEST VIDEO

VIDEO: LSE-listing will facilitate more funding opportunities for us, Dar Global CEO

ZAWYA COVERAGE

PODCAST: IFC is ready to back governments privatisation plans with capital

UAE's Presight AI to debut on Abu Dhabi Securities Exchange next week

Dubai's DEPA posts higher revenue for 2022 on post-COVID recovery

UAE exchange firm Al Ansari upsizes IPO on strong investor demand

Russia's war on Ukraine latest: Kyiv prepares to launch counteroffensive

UK economy set to grow in Q1 and confidence is growing -flash PMI

Franklin Templeton, Akamai defend sustainable investments amid backlash

Inside Ukraine’s scramble for “game-changer” drone fleet

Abu Dhabi's ADNOC gears up for June listing of marine & logistics unit - sources

THE BRI REPORT

China is reshaping the Belt and Road Initiative ahead of a post-pandemic era

DISCOVER MORE

LATEST VIDEO

ZAWYA NEWSLETTERS

ZAWYA COVERAGE