Adani impact: SBI, REC, IndusInd, ICICI, IDBI First Bank shares fall up to 5% on exposure concerns

Shares of a dozen banks and financial institutions took a beating on Monday after US prosecutors indicted billionaire Gautam Adani and seven other senior business executives in connection with an alleged $250 million bribery scheme that they said was concealed from US investors. The Adani group called the accusations baseless.

Banks and financial institutions that have exposure to the group, as per Adani Enterprises' annual report, included State Bank of India (SBI), ICICI Bank Limited, Axis Bank, IndusInd Bank Limited, IDFC First Bank Limited, Bank of India, RBL Bank Limited, Central Bank of India, Union Bank of India, YES Bank, REC Limited and IDBI Bank.

REC plunged 5.02 per cent to Rs 490.45. SBI shares were trading 2.76 per cent lower at Rs 779.90. Axis Bank cut morning losses and was trading 0.24 per cent higher at Rs 1,137.75. IndusInd Bank dropped 2.49 per cent to Rs 975.25. Central Bank declined 1.98 per cent to Rs 51.56. Union Bank slipped 1.03 per cent to Rs 114.85. IDFC First Bank was down 2.60 per cent at Rs 62.93. IDBI Bank fell 2.38 per cent to Rs 75.85.

Adani stocks, on the other hand, fell up to 20 per cent, before recovering some ground. An Adani group spokesperson said that the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.

He noted that the US Department of Justice statement itself suggested that the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. The Adani group will take all possible legal recourse will be sought, the spokesperson said.

"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws," the spokesperson said.

The BSE Financial Services index was down 80.77 points or 0.72 per cent at Rs 11,172.73. This is against 0.6 per cent drop in the BSE Sensex.

A Reuters report suggested that arrest warrants have been issued in the US for Gautam Adani and his nephew Sagar and prosecutors plan to hand those warrants to foreign law enforcement. Sagar is an executive director at Adani Green and currently oversees its strategic and financial matters, the report noted.

Narinder Wadhwa, Managing Director at SKI Capital said US laws allow for settlements in bribery cases, often through Deferred Prosecution Agreements (DPAs) or Non-Prosecution Agreements (NPAs). Companies can resolve charges by paying fines, admitting certain wrongdoing, and improving compliance practices.

"Notable precedents, like Siemens ($800 million) and Ericsson ($1 billion), suggest Adani may pursue a settlement to cap reputational and financial losses," he said.