Citigroup's wealth unit has stopped extending margin loans to its clients against securities of India's embattled Adani group, a source with direct knowledge of the matter said, as the conglomerate reels from a short-seller attack.
Office buildings and the Citibank logo are seen amidst the easing of the coronavirus disease restrictions in the Central Business District of Sydney, Australia, June 3, 2020. REUTERS/Loren Elliott/Fileswealth unit has stopped extending margin loans to its clients against securities of India's embattled Adani group, a source with direct knowledge of the matter said, as the conglomerate reels from a short-seller attack.its $2.
Citi's wealth unit decided to cut the loan-to-value ratio for credit against Adani securities to zero on Thursday, said the source, who declined to be named due to the sensitivity of the matter. The source said the loan-to-value was generally between 65% to 80% for most stocks but did not specify what the limit was for Adani's securities.
"In recent days, we have seen a dramatic price drop of Adani issued securities," the source said, quoting a Citigroup internal memo. "Stock and bond prices have plummeted following the negative news around the group's financial health."
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