India's Adani group told investors that several top Japanese and European banks have reaffirmed confidence in the embattled conglomerate after it was pummeled by a U.S. short seller's critical report, a company document showed.
Led by billionaire businessman Gautam Adani, the group's seven listed stocks have lost about $120 billion in market value since a Jan. 24 report by Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation, allegations the group has denied.
Adani group shares and bonds have regained some lost ground over the past month or so after it repaid some debt and attracted a $1.9 billion investment from boutique investment firm GQG Partners.
CONCERNS ABOUT DEBT
The Hindenburg report had sparked concern among investors about banks' exposures to the Adani group. Brokerage CLSA estimated in a Jan. 26 report that the consolidated debt of the top five Adani group companies, with some element of double counting, stood at $25.56 billion, with Indian banks forming 38% of that.
Adani was forced to shelve a $2.5 billion share sale due to the stock market rout that followed the Hindenburg report in which the short-seller also raised many questions on Adani's debt levels.
The State Bank of India (SBI) and other public sector lenders "have raised no red flags" and were comfortable with its financial position, and lenders "have reaffirmed they will continue to lend to Adani", the document added.
SBI did not respond to a request for comment.