Axis Bank clarifies it remains comfortable with exposure to Adani Group
Feb 04, 2023
Mumbai (Maharashtra)[India], February 4 : Axis Bank on Saturday clarified that the lender remains comfortable with its exposure to the Adani Group.
In a statement shared with exchanges, the lender wrote, "We extend credit, basis comfort on cash flow, security, and repayment capability of obligors as per the Bank's credit assessment framework. We remain comfortable with our exposure to Adani Group basis the same."
The lender also said its exposure to Adani Group is primarily to the operating companies in the ports, transmission, power, gas distribution, roads, airports, etc. It also added that the non-fund based facilities are primarily in the form of letters of credits and performance bank guarantees that are majorly short tenor.
In addition, the lender said the bank's fund based and non-fund based outstanding towards the Group's joint ventures is at 0.02 per cent and 0.25 per cent, respectively of the Bank's net advances.
Further, the lender said, "We (the bank) would like to highlight that the Bank has a resilient balance sheet with standard asset coverage of 1.53 per cent as of December 31, 2022."
An obligor, also known as a debtor, is a person or entity who is legally or contractually obliged to provide a benefit or payment to another.
The Gautam Adani-led group's assets had been declining since last week after Hindenburg Research came out with a damaging report on the various activities of the conglomerate.
In another development, S&P Dow Jones Indices said Adani Enterprises will be removed from the Dow Jones Sustainability Indices due to recent allegations of stock manipulation and accounting fraud that were levelled against the conglomerate.