Several public sector banks, including the State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB), saw their stock decline by as much as 7% on November 21, possibly linked to the alleged Adani bribery scandal.
Bank of Baroda shares dropped over 7%, Punjab National Bank shares fell 6%, and Canara Bank and SBI shares lost more than 5% each. Meanwhile, IndusInd Bank and IDFC First Bank shares dipped by over 3% each. The Nifty Bank index slid 0.6%.
State-owned REC Ltd shares plunged over 9%, and Power Finance Corporation (PFC) shares fell 8%, amid worries about their exposure to Adani Group entities.
Bribery Charges Against Adani
US prosecutors have charged Adani Group chairman Gautam Adani and seven others in a multimillion-dollar bribery and fraud case. According to Reuters, the defendants, including Sagar Adani, allegedly paid $265 million in bribes to Indian government officials to secure solar power contracts expected to generate $2 billion in profit over 20 years.
Adani Group stocks dropped by as much as 25% following these allegations, with Adani Enterprises, Adani Ports & SEZ, and Adani Energy Solutions bearing the brunt of the losses.
Adani Group Debt Exposure
Adani Group’s debt has seen a shift, with Indian banks and NBFCs now accounting for 36% of the total Rs 2,41,394 crore debt as of March 31, 2024. This is a notable increase from the previous year, where domestic lenders accounted for 31% of the total Rs 2,27,248 crore debt.
Indian banks and NBFCs have collectively extended over Rs 88,000 crore in loans to the Adani Group. The three leading public sector banks — SBI, PNB, and BoB — together hold more than Rs 40,000 crore in loans to the conglomerate, according to a media report
