Mumbai: India's largest lender State Bank of India (SBI) Friday said that its exposure to the Adani Group was well below the Reserve Bank of India's Large Exposure Framework that was secured by cash generating assets.
The SBI statement came at a critical juncture with markets tanking on the basis of a short selling report from Hindenburg Research with the Adani Group caught in a maelstrom losing Rs 4.18 trillion in market cap in two trading sessions.
The report by US-based investment research firm Hindenburg Research alleged that the group was engaged in "a brazen stock manipulation and accounting fraud scheme".
The conglomerate has called the report "maliciously mischievous, unresearched".
It has said that it is "evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research".
The financial research firm however stuck to its allegations, and even challenged the Adani Group to file suit against it not only in India but also in the United States too.
Indian banks have an exposure of around Rs 80,000 crore to the Adani Group, which is 38 per cent of the group's total debt.
"While as a matter of policy, we don't comment on individual clients, in the interest of setting the context right, we wish to clarify that SBI's exposure to Adani Group is well below the Large Exposure Framework.
"All exposure to the group from SBI is secured by cash generating assets with adequate TRA/Escrow mechanism in place, hence debt service will not be a challenge," said Swaminathan J., MD of corporate banking and subsidiaries at SBI, in a statement.
The SBI, however, did not comment on the amount of its exposure to the group.
Meanwhile, following the bloodbath and mayhem at share market for two consecutive days has also impacted Gautam Adani’s ranking in the rich list. Adani, who was the world’s third-richest person at the start of the week, is now ranked number seven on Forbes’ billionaires tracker.
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