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The Dharavi slum in Mumbai is a massive area where people live in incredibly cramped conditions, lacking proper sanitation, education, and healthcare facilities. In November 2022, the Maharashtra government invited bids to redevelop the area, and the Adani Group won the deal for Rs 5,069 crore.
Unfortunately, the Adani Group recently faced difficulties refinancing a $500 million bridge loan due next month. This was due to a report by short seller Hindenburg Research in January that caused the group’s assets to drop. However, the group has now pledged to address upcoming payments, boosting investor confidence.
Bank of Baroda to Review Loan Proposal for Adani Group
Some good news for Adani! Sanjiv Chadha, CEO and managing director of Bank of Baroda, a major state-backed lender in India, has stated that the bank is open to considering lending additional funds to Gautam Adani for his Dharavi redevelopment project in Mumbai. This announcement is a boost for Adani after some banks hesitated to refinance his bridge loan.
Chadha’s remarks indicate that the bank is willing to support Adani’s project, despite negative reports. However, he didn’t disclose the bank’s overall exposure to Adani’s business.
Underwriting Standards of Bank of Baroda
Chadha emphasizes that Bank of Baroda sticks to its underwriting standards, whether in good or bad times. He refrained from disclosing the bank’s complete exposure to Adani’s business empire, but had previously stated that it’s only a quarter of what’s allowed under the central bank’s framework.
Support for Embattled Gautam Adani
The CEO’s statement provides some support for Gautam Adani, who suffered a blow after Hindenburg Research’s report caused his assets to decline. Fortunately, the conglomerate’s plan to address upcoming payments has lifted investor sentiment.
The Dharavi slum redevelopment project is a significant endeavor that needs substantial financial support. While the Adani Group has encountered some hurdles, the Bank of Baroda’s offer to lend additional funds is a positive step. The project’s success is vital not only for the Adani Group but also for the people residing in the Dharavi slum. The redevelopment will enhance their living conditions and provide them with better education, healthcare, and sanitation facilities.