Adani Group Poses No Significant Downside Risk To Indian Banks: CLSA
The Adani Group poses no "significant downside risk" to Indian banks, global broking and research firm CLSA said on Thursday, as reported by the Economic Times (ET). It said that the total exposure of Indian banks is less than 40 per cent of the group's total debt.
The consolidated debt of the group was pegged at Rs 2.1 trillion.
Within this 40 per cent, the exposure of private banks is below 10 per cent and lenders like ICICI Bank and Axis Bank have indicated that they have largely financed assets with strong cash flows, such as airports or ports.
"PSU banks do have material exposure (30 per cent of group debt) but this debt has not increased in the past three years. Most of the incremental funding to the group for new businesses and acquisitions has come via overseas sources," it said.
"For PSU banks, the exposure is more meaningful at 0.6 per cent of loans and 5 per cent of FY24 net worth," the brokerage added.
CLSA said that even though the group's bank debt has increased 25 per cent in the past three years, the share of bank debt in overall group debt has reduced. Large acquisitions like Ambuja Cements and ACC have been largely funded by foreign banks.
This comes just days after a Januray 24 report by Hindenburg Research questioned how the Adani Group has used offshore entities in offshore tax havens such as Mauritius and the Caribbean Islands. It said that key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing".
On Wednesday, Adani called the report baseless. The group added that it will sue the US-based research group.
The report coincided with Adani's $2.5 billion secondary share sale which will go live on Friday. The anchor portion of the issue saw participation from Maybank Securities and Abu Dhabi Investment Authority among others on Wednesday.
The Battle For Depositors: US Lenders Ramp Up Efforts Amidst Rate Uncertainty
In the competitive landscape of the US banking sector, retaining depositors is paramount for lenders seeking to maintain... Read more
Beyond Capital: Unveiling The Complexities Of Bank Failure Prediction
In the realm of banking, the ability to predict and prevent failures is paramount for financial stability and consumer c... Read more
Central Banks And The Economic Horizon: Steering Through Uncertaintie
In the evolving landscape of global financial markets, the strategic role of central banks has come under intense scruti... Read more
Transforming Financial Operations With Robotic Process Automation
Author: Ricardo Goulart ... Read more
The Role Of Machine Learning In Fraud Detection
Author: Gerardine Lucero  ... Read more
Principles Of Islamic Banking And Finance
When it comes to banking, a significant new contender has entered the ring. The principles of Islamic banking and financ... Read more