PNB has a total exposure to Adani Group of 70 billion rupees ($859.30 million), but there is now no cause for concern, the state-run lender’s managing director and chief executive said on Monday.

Hindenburg Research, a short-seller in the United States, raised worries about Adani Group’s debt levels and use of tax havens last week. Adani Group has said that it is in compliance with all local laws and has made all required regulatory disclosures.

“Around 25 billion rupees of the 70 billion rupees is related to Adani’s airport business,” PNB CEO Atul Kumar Goel told reporters following the company’s quarterly results in a virtual news conference.

“Any exposure we have is backed up by cash flow.”

However, Goel stated that the bank is keeping a “tight eye” on the developments around Hindenburg’s research study.

He noted that the bank had not made any loans to the Adani Group by pledging shares.

Due to increased provisions for bad loans, Punjab National Bank reported a 44% decline in net profit for the October-December quarter.

The lender’s asset quality improved, with the gross non-performing asset ratio falling to 9.76% at the end of December from 10.48% at the end of the previous quarter.

As of the end of December, its net NPA ratio was 3.30%.

Goel stated that the bank is aiming for a gross NPA ratio of roughly 9% and a net NPA ratio of 3% by the end of March. For 2022-23, the bank anticipates credit growth of 12-13% and deposit growth of 8-9%. $1 equals 81.4620 Indian rupees

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“PNB has exposures of Rs 7,000 cr to 8–9 Adani Group entities. Adani’s Airport business is where the bulk of our risk lies. As most of the coverage is making money to pay their bills, I don’t have to worry about the current issue with Adani. To that end, we will continue to monitor the situation “This, as stated by Goel.

Punjab National Bank (#PNB) which has about Rs 7,000 crore exposure in Adani Group entities on Monday said it is keeping a close watch on situation developing following the damning disclosures by Hindenburg Research

Read:https://t.co/OCyLWYh7dN

— Stocks Ki Baat (@stockskibaat) January 30, 2023

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IDBI Bank would continue its primary dealer business even if a foreign bank acquires majority stake and management control in the private sector bank, the finance ministry said on Tuesday.

As part of the primary dealer activity, IDBI Bank is involved in market making activities in respect of G-Secs, including T-bills. IDBI’s treasury actively participates in primary auction of government bonds.

In response to a query on the primary dealership activities undergoing change/getting impacted, where a foreign bank acquires more than 50 per cent shareholding and management control in the strategic sale, the Department of Investment and Public Asset Management (DIPAM) said, “There may not be any impact on the primary dealer business of the IDBI Bank.”

Primary dealers are RBI registered entities that buy and sell government bonds. They have the licence to buy government securities (G-secs) directly from the central bank and sell them to other buyers, thereby creating market for G-Secs.

The clarification is part of the supplementary responses to queries received from interested bidders for IDBI Bank. The first set of responses were released last month.

The DIPAM had then clarified that IDBI Bank will continue to operate as an ‘Indian private sector bank’ after its strategic sale even if the successful bidder is a foreign bank.

The government had on October 7 invited bids for privatising IDBI Bank and said that it along with LIC will sell a total of 60.72 per cent stake in the financial institution. The last date for putting in Expression of Interest (EoI) or preliminary bids is December 16.

The government and LIC together hold 94.72 per cent stake in IDBI Bank and have offered to sell 60.72 per cent stake in the bank. The successful bidder would be required to make an open offer for acquisition of 5.28 per cent of the public shareholding.

Interested bidders would have to clear RBI’s ‘Fit & Proper’ assessment and get security clearance from the government/home ministry in the EoI stage itself to be able to access IDBI Bank’s data room for due diligence

The DIPAM had earlier said that potential investors should have a minimum net worth of Rs 22,500 crore, must report net profit in three out of the past five years to be eligible for bidding for IDBI Bank.

Also, a maximum of four members would be allowed in a consortium. The successful bidder would be required to mandatorily lock-in at least 40 per cent of the equity capital for five years from the date of acquisition.

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