Amidst the free fall of Adani Group stocks in the wake of short-seller Hindenberg Research’s report, SBI, the country’s biggest lender, stated on February 3, 2023, that its total exposure to the Adani Group is 0.88% of its book value or approximately ₹27,000 crores.
SBI's total exposure to Adani Group is 0.9 per cent of overall loan book, says chairman Dinesh Khara
— Press Trust of India (@PTI_News) February 3, 2023
Dinesh Khara, the Chairman of SBI, stated that the bank does not anticipate any difficulties for the embattled ports-to-mining group, Adani, in fulfilling its debt obligations. He emphasized that SBI has not provided any loans collateralized by the group’s shares.
“Do not envisage any challenge from Adani Group to meet debt obligations; no lending against shares to conglomerate,” Khara said.
Khara mentioned that SBI’s loans to Adani Group projects are based on their tangible assets and sufficient cash flows, and noted that the group has a strong record of timely repayments. He added that the Adani group has not made any requests for refinancing.
The clarification from Khara came amid the stock market bloodbath suffered by Adani Group stocks. The Adani Enterprise stock on Friday opened at Rs 1,490 but dramatically fell to Rs 1,017.45 levels, where it saw resistance from the bulls. It made a sharp recovery and closed at Rs 1,565.25, marginally higher than its opening levels.
The stock market turmoil faced by the Adani Group stocks could be attributed to a report published by Hindenburg Research, a short-seller that accused the group of accounting fraud and stock price manipulation.
Hindenburg Research report accuses Adani Group of fraud and stock price manipulation
Hindenburg Research, which claimed of having conducted an investigation for the last two years, said Gautam Adani, the founder and chairman of the Adani Group, has a net worth of approximately $120 billion, mainly due to an 819% average stock price growth in the group’s seven most significant publicly traded companies over the last three years.
The research involved interviewing multiple individuals, including former senior executives of the Adani Group, examining thousands of documents, and conducting due diligence site visits in nearly a dozen countries, Hindenburg Research said.
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations,” said the forensic financial research company in its report.
Adani Group trashes Hindenburg Report as malicious misinformation
However, the Adani Group promptly trashed the Hindenburg Research report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations’. The Group stocks lost Rs 46,000 crores in market cap after Hindenburg claimed that the Indian giant had participated in a clear stock manipulation and accounting fraud scheme over decades.
“We are shocked that Hindenburg Research published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” the Group said in a statement.
