SBI’s exposure to Adani is for assets with adequate cash-flow, says Chairman Dinesh Khara

SBI Chairman Dinesh Kumar Khara on Friday said that the bank’s lending to Adani group companies are only to projects that are tangible assets and have good cash flow and so it was not worried about stock market volatility.

“We have lent to Adani for projects which are having tangible assets and adequate cash generation. They have been in a position to meet their obligations. We have not extended any loan against shares. There is no such portfolio which we have. So the impact of the stock market prices of the stocks will not really impact any of the margin calls and any of the loans which they have raised from us,” he said.

Adani stocks have been routed over the last week following short seller Hindenburg’s report claiming market manipulation, accounting fraud and use of offshore shell companies for money laundering, allegations that the conglomerate refuted.

This has also led to a decline in stocks of banks and other institutions such as SBI and LIC that hold stake in Adani group companies.

Khara sought to reassure investors saying that the exposure to Adani is quite low.

“So far as the quantum is concerned, it is actually about 0.8-0.9 percent of our total loan book. So from that point of view we don’t envisage any kind of a challenge in terms of their ability to service the loan obligations which they have taken,” he said.

“Non-fund based exposure is essentially letter of credit and the bank guarantees and these bank guarantees are performance bank guarantees and this is not against any equity raising or any such activity. So in all the total exposure is about 0.88 percent as on December 31,” he said.