MUMBAI: Indian banks’ publicity to the Adani Group is inside manageable limits, mentioned brokerage homes CLSA and Jefferiesas the gang fended off an assault from well known short-seller Hindenburg Research.
The US short-seller mentioned it held brief positions within the Indian conglomerate, accusing it of mistaken use of offshore tax havens and flagging issues about top debt that eroded $11 billion in investor wealth on Wednesday.
“While we watch for developments here, we don’t see material risk arising to the Indian banking sector,” brokerage company Jefferies mentioned in a word dated Jan. 26.
According to the brokerage, the gang’s debt accounts for 0.5% of general loans around the Indian banking sector. For public sector banks (PSU), the debt is at 0.7% of general loans and for personal banks, it’s at 0.3%.
“Our recent conversation with industry participants also indicated that cash-flows and repayment timelines of debt have been conservatively planned,” Jefferies mentioned.
The organization accommodates the flagship Adani Enterprises Ltd in addition to Adani Ports and Special Economic Zone Ltd , Adani Power Ltd, Adani Green Energy Ltd and Adani Transmission Ltd.
Brokerage CLSA estimates the consolidated debt of those 5 corporations at 2.1 trillion rupees ($25.73 billion), or at 1.9 trillion rupees, with the exception of inter-group lending.
Indian banks have publicity to lower than 40% of general organization debt, the brokerage estimates.
“Within this, private banks’ exposure is below 10% of total group debt and most banks have indicated that they have largely financed assets with strong cash flows, such as airports/ports,” CLSA mentioned.
While PSU banks have subject material publicity at 30% of organization debt, this degree has no longer greater previously 3 years, CLSA mentioned.
“Most of the incremental funding to the group for new businesses and acquisitions has come via overseas sources.”
The brokerage pegs the publicity of Indian personal banks at 0.3% of FY24 loans and 1.5% of FY24 net-worth. For PSU banks, the publicity is 0.7% of FY24 loans and six% of FY24 net-worth, CLSA mentioned.
The US short-seller mentioned it held brief positions within the Indian conglomerate, accusing it of mistaken use of offshore tax havens and flagging issues about top debt that eroded $11 billion in investor wealth on Wednesday.
“While we watch for developments here, we don’t see material risk arising to the Indian banking sector,” brokerage company Jefferies mentioned in a word dated Jan. 26.
According to the brokerage, the gang’s debt accounts for 0.5% of general loans around the Indian banking sector. For public sector banks (PSU), the debt is at 0.7% of general loans and for personal banks, it’s at 0.3%.
“Our recent conversation with industry participants also indicated that cash-flows and repayment timelines of debt have been conservatively planned,” Jefferies mentioned.
The organization accommodates the flagship Adani Enterprises Ltd in addition to Adani Ports and Special Economic Zone Ltd , Adani Power Ltd, Adani Green Energy Ltd and Adani Transmission Ltd.
Brokerage CLSA estimates the consolidated debt of those 5 corporations at 2.1 trillion rupees ($25.73 billion), or at 1.9 trillion rupees, with the exception of inter-group lending.
Indian banks have publicity to lower than 40% of general organization debt, the brokerage estimates.
“Within this, private banks’ exposure is below 10% of total group debt and most banks have indicated that they have largely financed assets with strong cash flows, such as airports/ports,” CLSA mentioned.
While PSU banks have subject material publicity at 30% of organization debt, this degree has no longer greater previously 3 years, CLSA mentioned.
“Most of the incremental funding to the group for new businesses and acquisitions has come via overseas sources.”
The brokerage pegs the publicity of Indian personal banks at 0.3% of FY24 loans and 1.5% of FY24 net-worth. For PSU banks, the publicity is 0.7% of FY24 loans and six% of FY24 net-worth, CLSA mentioned.