Indian banks’ exposure to the Adani Group will not materially affect their credit quality since it is less than one percent of their outstanding, but the risks could increase if the conglomerate shifts to bank loans in case of global markets turning averse to buying Adanis bonds, said Moody’s Investors Service.
The global rating company said that banks with their improved capital buffers and profitability are strong enough to absorb any potential losses from their current exposures to the Adani group without materially hurting their credit strength.
“Banks’ exposures to Adani are not large enough to affect their credit quality materially. We estimate that their exposures to Adani are not more than 1% of their total loans,” Moody’s said in a report, which estimated that the exposures of public sector banks are larger than for private sector banks.
