Adani Stocks Row May Not Have Significant Financial Spillover Risks: S&P
NDTV
S&P Senior Director (Infrastructure & Utilities Ratings), Abhishek Dangra said as per external estimates, the exposure of the banking sector to Adani group companies is less than 1 per cent
S&P Global Ratings on Tuesday said there will not be any significant direct financial spillover risks because of the problems being faced by the Adani group, though there can be some secondary impact such as banks undertaking extra due diligence while giving loans to corporates.
S&P Senior Director (Infrastructure & Utilities Ratings), Abhishek Dangra said as per external estimates, the exposure of the banking sector to Adani group companies is less than 1 per cent and also the credit ratings of the firms are not at 'distress level'.
However, he added the risk premium to certain Indian companies and those within the Adani umbrella may rise and if banks have governance concerns, they put in more due diligence which may result in delay in sanctioning credit.
"So there are no significant financial spillover risks directly. But there might be some secondary aspects. More so, when the dollar bond market is not necessarily open given high dollar rates, and domestic banking system is the one where many of the companies have started to look for funds, there some of the banks may do extra due diligence which might impact either the cost or timelines," Dangra said in a webinar.
