Bank of Baroda CEO and MD Sanjiv Chadha told Bloomberg news that he is not concerned about volatility around Adani Group stocks, all of which have suffered a significant dip in market valuation.
By ASH 24 Web Desk: One of India’s top state-run banks is open to lending additional money to the Adani Group, at a time when global financial institutions have turned a cautious eye towards the conglomerate.
Bank of Baroda CEO and MD Sanjiv Chadha told Bloomberg news that he is not concerned about market volatility around Adani Group stocks, all of which have suffered a significant dip in market valuation.
He added Bank of Baroda will extend loans to the conglomerate if it meets the lender’s underwriting standards. Chadha’s statement comes as a relief to billionaire Gautam Adani as some banks have balked at refinancing a $500 million bridge loan due next month.
Several foreign banks have grown hesitant in lending to the Adani Group after US short seller Hindenburg Research came out with a scathing report last month. The firm accused Adani Group of stock manipulation and improper use of tax havens.
While Adani Group has dismissed the allegations and has taken several steps to tackle Hindenburg, investors and shareholders still remain concerned about the long-term impact of the report on the company’s balance sheet.
Declining to elaborate on the bank’s overall exposure to the Adani Group, he said, “You have underwriting standards and you stick to them in good times as well as bad times.”
It may be noted that Bank of Baroda said earlier that its exposure to the Adani Group is one-fourth of permitted under the exposure framework of the Reserve Bank of India. The bank had also said that exposure to the Adani Group has come down as a percentage of the balance sheet.
Bank of Baroda is also open to extending loans to the group for its Dharavi redevelopment project, Chadha said. The Adani Group had bid over Rs 5,000 crore for the project to remodel the slum in 2022.
“This is subject to an extended due diligence and depends upon concentration limits,” Chadha said.