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Indian firms` exposure in Dubai over Rs 7,000 cr

Last Updated: Friday, November 27, 2009 - 20:26

New Delhi: Corporate India, bankers, realty players and exporters were today shaken up a bit by Dubai`s debt repayment crisis, where their exposure could be at least Rs 7,000 crore, but hoped that the problem would blow over.

The banks said their exposure could be Rs 5,000-6,500 crore to the Middle-East city, where state-owned conglomerate Dubai World has sought more time to repay debts of USD 59 billion.

This included Bank of Baroda with about Rs 5,000 crore of
exposure and SBI of less than Rs 1,500 crore. A host of other
major banks, including largest private sector lender ICICI
Bank, said they had no exposure to Dubai.

Besides, some realty players also have presence in Dubai,
but an overall exposure of below Rs 100 crore could be
ascertained from the sector. Majority of leading players like
DLF, Unitech, Parsvnath and EmaarMGF claimed that they would
not be impacted by the crisis. Those who disclosed
exposure to
Dubai included Omaxe (about Rs 40 crore).

EmaarMGF, a joint venture between Dubai`s Emaar Properties
and India`s MGF, said it would not be impacted, although the
rating agencies like S&P and Moody`s cut credit ratings for
the Dubai firm.

Other companies having exposure to Dubai included Larsen
and Toubro (over Rs 100 crore) and Nagarjuna Construction
(over Rs 400 crore).

While most segments of the Indian economy exuded
confidence that the crisis would not impact them, exporters
expressed concern in the wake of the UAE, of which Dubai is a
part, emerging as India`s largest export destination.

Commerce and industry Minister Anand Sharma said the
crisis would have no impact here, but Federation of Indian
Export Organisations was anxious about the possibility of
Indian lenders not honouring credit guarantee from Mid-East.

RBI Governor D Subbarao also said in Hyderabad that he
would ask the banks to report their exposure to Dubai, so that
the extent of the problem could be ascertained.

Although Bank of Baroda and SBI admitted to having
lending exposure to Dubai, almost all the banks, including the
two, said they did not envisage any impact on balance sheets.

Besides direct and existing exposures, a host of Indian
companies had proposed investments in Dubai.

Omaxe said it had made an upfront payment of Rs 40 crore
for two property projects in Dubai to Nakheel, but since it
has been put on hold the company has asked for refund.

The projects were envisaged to have a total cost of Rs
1,500 crore with estimated revenues of about Rs 2,850 crore.

Other companies said to have exposure to Dubai included
Rajesh Exports and Nagarjuna Construction, which said it is
doing a water pipeline project worth Rs 680 crore in Dubai.

However, companies like HCC, Punj Lloyd, GMR, Simplex and
C&C Construction said they have no existing exposure in Dubai.

Besides, those exporting basmati rice, onions and other
commodities to Dubai could be hit in short-term, officials


First Published: Friday, November 27, 2009 - 20:26
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