Banks with exposure to Adanis see m-cap fall
NEW DELHI: Indian banks with exposure to the Adani Group were among those that saw the worst declines in their market capitalisation (m-cap) in Q4 FY23, according to an analysis by S&P Global Market Intelligence.
State-owned Punjab National Bank fell two spots to 10th place on the agency’s ranking of India’s largest banks by m-cap after its market cap plunged 17.45% in the January-March quarter to $6.25 billion (about Rs 51,300 crore) , the biggest decline among the top 10 banks.
State Bank of India, the nation’s biggest lender by assets, suffered a 14.66% fall, while Hindujau Group’s IndusInd Bank followed with a 12.42% slump in its valuation. Among the banks that lost the most market cap in the top 10 were Bank of Baroda and Axis Bank Ltd., with their valuation shrinking falling 9.07% and 8.02%, respectively.
The fallout was triggered by US-based short-seller Hindenburg Research’s January 24 report, which alleged that Adani “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.” Adani Group denied the allegations soon after the Hindenburg report was published.
The biggest casualty of the report was Adani Group itself as the combined m-cap of its 10-listed entity fell by over 50% during the quarter. Besides the port-to-power conglomerate, state-run insurer LIC, which owns Rs 30,000 crore worth of stakes in different Adani companies, was highly impacted as its shares fell nearly 25% during the quarter.
Following the report, most banks disclosed their exposure to the Group to calm the nerves of investors. While State Bank of India, IndusInd Bank and Axis Bank said their exposures to the group remain below 1% of the total advances, Bank of Baroda said its exposure was at about 25% of the central bank’s prescribed limit.
PNB m-cap falls 17%, SBI valuation tumbles 16% in Q4
PNB fell two spots to 10th place on the agency’s ranking of India’s largest banks by m-cap after its market cap plunged 17.45% in the January-March quarter to $6.25 billion (about Rs 51,300 crore) , the biggest decline among the top 10 banks. SBI suffered a 14.66% fall, while IndusInd Bank followed with a 12.42% slump in its valuation