Indian banks are reviewing their Adani exposure and whether they need to tighten due diligence, eight bankers said on Thursday, after the group’s billionaire founder Gautam Adani was indicted by US authorities over an alleged $265 million bribery scheme.

Adani Group’s listed stocks, which at one point saw as much as $34 billion wiped off their market value, meanwhile recovered ground as some partners and investors rallied behind it.

State Bank of India will not stop lending to ongoing Adani projects that are nearing completion, two sources told Reuters, but will exercise caution when disbursing loans to ensure all terms and conditions are being met.

Bank of India, Union Bank, ICICI Bank, Canara Bank, IDBI Bank and RBL Bank, which have relatively smaller exposures to the Adani Group, are undertaking similar exercises, sources said.

A regulatory source aware of the development said from a banking system perspective that no entity was over-exposed to the Adani group and there was no cause for concern.

Earlier today, Israel said it wanted Adani Group to continue to invest there, adding that the US allegations were not “problematic” from its perspective.

“We wish Adani and all Indian companies continue to invest in Israel,” Israel’s Ambassador to India Reuven Azar told Reuters in an interview.

The Adani Group holds a 70 per cent stake in Haifa port in northern Israel and is involved in projects with Israeli firms, including manufacturing military drones and commercial semiconductors.

Adani and seven others are accused by US authorities of being part of a scheme to pay bribes to secure Indian power supply contracts. The Adani Group has denied the allegations.

The Indian ports-to-power conglomerate has also received public backing from Abu Dhabi’s International Holding, which maintained its outlook on investments in the group.

“Our partnership with the Adani Group reflects our confidence in their contributions to the green energy and sustainability sectors,” IHC said on Wednesday, adding that it “continues to evaluate relevant information and developments”.

IHC, which is one of Adani’s key foreign investors, boosted its stake in the group’s Adani Enterprises flagship to more than 5pc last year after selling down investments in Adani Green Energy and Adani Energy Solutions.

Shares in Adani Green, the company at the centre of the bribery allegations, rose by 10pc today, hitting the cap on gains in a single session for a second consecutive day, with Adani Energy also up the maximum 10pc.

The total losses in the value of Adani Group’s 10 listed companies have narrowed to $14.5bn from about $34bn, the low reached on Tuesday after the US indictments.

Fallout

Global investors say worries of a wider spillover from the Adani allegations will hurt sentiment in India, but not the long-term outlook, as they wager one of the world’s best-performing markets will get back on track next year.

Investors expect a stronger spotlight on governance and disclosure, and perhaps some volatility, but say the affair has not challenged the reasons they are in India in the first place — for exposure to a growing economy and a huge consumer market.

Indian Prime Minister Narendra Modi’s government has not commented on the allegations against the Adani Group and has blocked opposition party demands for a debate on them.

Both houses of India’s parliament were suspended temporarily within minutes of opening today as opposition lawmakers disrupted proceedings for the third day over the issue.

Many opposition parties accuse Modi and his Bharatiya Janata Party of favouring Gautam Adani and blocking investigations against him, charges which both have denied.

The Adani Group, which is among India’s biggest business empires, has been under scrutiny since January 2023 short seller Hindenburg Research accused it of stock manipulation, which the group has denied, and questioned its high debt levels.

Adani Green said a day ago that Adani had been charged by the US Securities and Exchange Commission (SEC) for alleged violations of securities law and faced potential fines but had not been charged under the US Foreign Corrupt Practices Act.

The civil action launched by the SEC runs in parallel to US federal prosecutors’ indictment against Adani and others.

Repercussions from the indictment have mounted for the Adani Group over the past week, with credit rating agencies cutting the outlook for some of the listed companies’ bonds.

French oil major TotalEnergies said on Monday it would not make any more investments in the Adani Group until there was clarity over the allegations and consequences. Total has a 20pc stake in Adani Green.

Kenya has scrapped a $2bn procurement project that was to give Adani control of the country’s main airport and it shelved a 30-year, $736m public-private partnership, signed by Adani Energy with its energy ministry in October.

Closer to home, Sri Lanka said it would investigate all Adani-related projects in the island nation, while Bangladesh is investigating power generation contracts signed under the previous prime minister, one of which was with Adani Power.