The Lead

J&K Bank Speaks: Rs 250 Cr exposure in Adani Power, receiving repayments regularly

JAMMU: Breaking the silence over its Rs 255 crore exposure in Adani group, Jammu and Kashmir bank on Friday said that it has been receiving regular repayments for the amount loaned to the Indian giant for two power projects and there was no need to panic.

Nishikant Sharma, Deputy General Manager, Consumer, and Commercial Banking, J&K bank said that the bank has given two term loans for two power projects of Adani Power, one of the companies of the Adani Group, whose combined market capitalisation has collapsed by more than $120 billion — about half of the group’s value — since US short-seller Hindenburg Research, released an explosive report last week.

The Dispatch on Thursday reported that Jammu and Kashmir Bank has loaned Rs 255.6 Crore to Adani group, around 3% of its revenue. While all major banks issued statements after the RBI sought details of their exposure Thusrday morning, Baldev Parkash, Managing Director and Chief Executive Officer of Jammu and Kashmir Bank was reluctant to comment on the issue.

‘Details are confidential’, Mr Prakash told The Dispatch Thursday, while claiming that there was no cause for worry.

On Friday, however, DGM Nishikant Sharma confirmed that the bank indeed has Rs 250 Crore exposure in Adani group, but asserted that there was no need to panic as the bank is receiving timely repayments.

“Jammu and Kashmir Bank has around Rs 250 crore exposure in Adani group, through two terms loans given to Adani Power for two of its power projects,” Sharma told a local reporter of Asia News.

These thermal power projects— one in Maharashtra and one in Mudra, Gujarat, are running for 10 years now and have been generating money, he added.

“Both these projects are operating well. We have been receiving repayments for both the term loans regularly,” Sharma said.

Sharma said that there is no need to panic as our loans are secured, standard and regular.


Rs 255 Cr loaned to Adani, does J&K Bank need to worry?

“I see no risk as of now. The bank would be worried if the account had turned an NPA, but that is not the case. Both the loans are regular. There is no default in repayment as on date. Adanis have a healthy cash flow and all loans are being regularly repaid to all banks,” he reassured the public.

Sharma’s reassurance that came Friday morning showed positive results with the bank’s share gaining Friday afternoon, and closing at Rs 52.85, strong by 0.48%, recovering from the low of Rs 50.60 recorded at 10:45 am.

The share price of Adani Enterprises took a fresh knock on February 3, plunging 35 percent in the morning trade, a day after it was placed under National Stock Exchange’s Additional Surveillance Measure framework.

At 10.41 am, the stock was down 35 percent at Rs 1,017.45 apiece on the NSE. This is the worst-ever intraday fall for the stock. The stock has wiped out 76 percent value from its peak of Rs 4,190 hit in December 2022.

The trouble for the Indian giant started last week when Hindenburg Research alleged that the Adani Group was engaged in “a brazen stock manipulation and accounting fraud scheme”. It accused Adani of accounting fraud and artificially boosting its share prices, calling it “the largest con in corporate history”.

Indian banks have around Rs 80,000 crore exposure in Adani, which is 38 per cent of the group’s total debt. Bank debt—term loans, working capital loans, and other facilities—constitute about 38 per cent of the group’s total debt.


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