Foreign banks have no plans to scale down exposure to Adani Group

Foreign banks including Standard Chartered Bank and Citibank have no plans to scale down their exposure, or stop their credit facilities to the Adani Group companies, several sources said. They are keeping the credit lines open and funds flowing.

Though the wealth management arms of Citibank, Standard Chartered and Credit Suisse have said that they would not be temporarily accepting bonds of Adani Group companies as collateral from their wealth clients, the banks themselves are ready to keep the lending lines open and even help the company pay down debt, sources said.

Of the total debt of the group, foreign banks accounted for 18 percent of debt as at the end of 2021-22.

In response to an email sent by businessline, Standard Chartered Bank in India said, “We do not comment on individual entities or market speculation.” Citibank said it would not be able to comment on the matter.

The consolidated gross debt of the group in 2021-22 was at ₹1.9-lakh crore, a note by Jefferies had said last month. Its net debt was ₹1.6-lakh crore, spread across group companies. Most of the debt is concentrated in Adani Green Energy, Adani Power and Adani Ports and Special Economic Zone. It had also pegged total debt of the group to foreign banks at ₹33,900 crore.

Standard Chartered is a banker to Adani Group companies and according to sources has a larger share of loans to the group, compared with other foreign banks. Citibank has a lower exposure and according to sources within the bank, the group is in good standing with the bank in terms of loan repayments.

Green bonds

Apart from advancing loans in the normal course of business, some of the foreign banks have subscribed to green bonds issued by Adani group companies and also advanced ESG-based loans to meet sustainability targets. Foreign banks had entirely funded the ₹42,000-crore acquisition of Holcim’s operations in India by the Adani Group.

Sources said that considering the significant stakes that foreign banks have in terms of their debt, they would have to protect their interests to ensure that the group remains solvent and has adequate liquidity to meet its obligations.