Indian banks are reviewing their exposure to Adani and whether they need to tighten due diligence, eight bankers said on Thursday, after US authorities charged the group’s billionaire founder Gautam Adani over an alleged $265 million bribery scheme.
Meanwhile, Adani Group’s listed shares, which at one point saw it lose as much as $34 billion of its market value, have regained ground as some partners and investors have rallied behind it.
Two sources told Reuters that the State Bank of India will not stop lending to Adani’s ongoing projects that are nearing completion, but will be careful when disbursing loans to ensure all terms and conditions are met.
Bank of India, Union Bank, ICICI Bank, Canara Bank, IDBI Bank and RBL Bank, which have relatively smaller exposures to the Adani group, are undertaking similar exercises, the sources said.
A regulatory source familiar with the development from the banking system’s perspective said there was no entity overly exposed to the Adani Group and there was no cause for concern.
Earlier today, Israel said that it wants the Adani Group to continue investing there, adding that the American allegations do not represent “problematic” from its point of view.
“We hope that Adani and all Indian companies will continue to invest in Israel,” Israeli Ambassador to India Reuven Azar told Reuters in an interview.
Adani Group owns a 70% stake in the port of Haifa in northern Israel and is involved in projects with Israeli companies, including the manufacture of military drones and commercial semiconductors.
US authorities accuse Adani and seven others of being part of a scheme to pay bribes to secure Indian energy supply contracts. The Adani Group denied the allegations.
The Indian ports-to-energy group also received general support from Abu Dhabi International Holding Company, which maintained its expectations regarding investments in the group.
“Our partnership with the Adani Group reflects our confidence in their contributions to the green energy and sustainability sectors,” IHC said on Wednesday, adding that it “continues to evaluate relevant information and developments.”
IHC, one of Adani’s major foreign investors, boosted its stake in the group’s flagship Adani Enterprises to over 5% last year after selling investments in Adani Green Energy and Adani Energy Solutions.
Shares of Adani Green, the company at the center of the bribery allegations, rose 10% today, hitting maximum gains in a single session for the second day in a row, while Adani Energy shares also rose by a maximum of 10%.
Total losses in the value of the 10 companies listed in the Adani Group narrowed to $14.5 billion from about $34 billion, the lowest level reached on Tuesday after the US indictments.
Global investors say fears of a wider spillover from the Adani allegations will hurt sentiment in India, but not the long-term outlook, as they bet that one of the world’s best-performing markets will get back on track next year.
Investors expect a stronger spotlight on governance and disclosure, and perhaps some volatility, but say the issue has not challenged their reasons for being in India in the first place — exposure to a growing economy and huge consumer market.
The government of Indian Prime Minister Narendra Modi did not comment on the accusations against the Adani Group and prevented opposition parties’ demands for a discussion on them.
Both houses of India’s Parliament were temporarily suspended within minutes of their opening today, as opposition lawmakers disrupted proceedings for a third day over the issue.
Many opposition parties accuse Modi and his Bharatiya Janata Party of favoring Gautam Adani and obstructing investigations against him, accusations that they both deny.
The Adani Group, one of India’s largest business empires, has been under scrutiny since January 2023, and short-selling firm Hindenburg Research accused it of stock manipulation, which the group denied and questioned its high debt levels.
Adani Green said a day earlier that the US Securities and Exchange Commission (SEC) had charged Adani with alleged securities law violations and he faced potential fines but had not been charged under the US Foreign Corrupt Practices Act.
The SEC’s civil lawsuit runs parallel to the indictment brought by US federal prosecutors against Adani and others.
The repercussions of the indictment on the Adani Group escalated over the past week, as credit rating agencies lowered their expectations for the bonds of some listed companies.
French oil giant Total Energies said on Monday that it will not make any further investments in Adani Group until there is clarity on the allegations and consequences. Total owns a 20% stake in Adani Green.
Kenya canceled a $2 billion procurement project that was supposed to give Adani control of the country’s main airport, and also suspended a 30-year, $736 million public-private partnership that Adani Energy signed with the Ministry of Energy in October.
At home, Sri Lanka said it would investigate all projects related to Adani in the island nation, while Bangladesh is investigating power generation contracts signed under the former prime minister, one of which was with Adani Power.