Indian banks are increasing their review of lending to the Adani Group after claims by U.S. authorities that group founder Gautam Adani ran a $265 million bribery scheme. Among several major lenders are State Bank of India (SBI), Union Bank, and ICICI Bank, who are reviewing exposures to ensure that they adhere to the terms of lending. In that regard, however, SBI has sought to state that it would not halt funding for nearly completed projects for Adani.
The decision to review Adani’s exposure comes after the conglomerate’s stocks initially faced a steep market decline, erasing $34 billion in value. The losses, however, have narrowed to $14.5 billion as the group’s shares rebounded, bolstered by investor confidence and strategic backing from partners like Abu Dhabi’s International Holding Company (IHC).
Indian banks review Adani Group, stakeholders watch closely
While Indian banks are reviewing their exposure to Adani, international stakeholders are watching closely. French energy giant TotalEnergies has put further investments in Adani projects on hold until clarity emerges on the allegations. Kenya and Sri Lanka are also reviewing Adani-linked contracts as governance practices come under increasing scrutiny.
The Adani Group has denied the bribery claims, stating that the charges are unfounded. Opposition parties in India have successfully disrupted parliamentary sessions, demanding that the government is favoring the conglomerate. The administration of Prime Minister Narendra Modi has kept quiet on the issue, with this only adding to political tensions.
Investor view, while shaken, stays cautiously optimistic about India’s broader market potential. Analysts believe the allegations will lead to improved focus on corporate governance and clarity rather than discourage long-term investment in India’s growing economy.
As Indian banks assess their exposure to the Adani group, recovery in stock performance is becoming observable for the listed entities such as Adani Green Energy and Adani Enterprises. However, regulatory and reputational challenges are looming over the group. Rating agencies have already devalued the outlook for some of Adani’s bonds echoing concerns over potential financial fallout.
The ongoing investigations and heightened scrutiny emphasize the stakes for Adani Group and its financial partners, as the allegations continue to ripple across markets and industries globally.
Also, see: Bribery allegations against Adani Group sparks concerns among global investors