Moody's seeing about any rise in Indian lenders' Adani loans

By siliconindia  |  Friday, 10 February 2023, 05:13:22 PM IST

Moody's seeing about any rise in Indian lenders' Adani loans

Moody’s Investors Service is now on the lookout for any increase in Indian lenders’ loans to billionaire Gautam Adani’s Group, must international funding dry up in the aftermath of a short seller’s allegations of stock manipulation and corporate fraud.

“The main point we will be watching out for is if the banks decide to increase exposure to entities under the umbrella, where are those exposures going? Are they going to operating assets or not?” said Alka Anbarasu, associate managing director, of Moody’s, in a Bloomberg TV interview on Friday. “My colleagues are looking at how the funding environment for the entities may tighten,” Anbarasu said, adding that the group does not have a lot of debt maturing until 2025.

The Adani crisis comes at a time when Indian banks have cleaned up their asset quality and balance sheets after they got saddled with one of the world’s highest-soured-loan ratios on their books. Their credit quality is on the mend, stressed assets have steadily declined, and disclosure standards have improved.

So far, Indian banks and the regulator have reiterated that the banks’ exposures of billions of rupees to the Adani group, which has denied allegations of wrongdoing, are less than 1% of their loan books and against cash-generating operating assets.

“These exposures are across multiple operating entities, which are also collateralized, so to that extent, we think the exposures are quite manageable,” Anbarasu said.

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