Public sector banks exposed to Adani Group companies saw heavy buying on the morning of March 3 after the port-to-power group raised funds by selling some of its stakes to cut debt.

The Nifty PSU Bank Index, a benchmark for public sector banks, rose more than 4%, led by gains in Punjab & Sind Bank, UCO Bank, Union Bank of India, Bank of Maharashtra and Bank of India, which rose as much as 7%.

Heavyweights State Bank of India and Bank of Baroda rose 4-5%.

On March 2, promoters of Adani Group sold stakes worth Rs 15,446 crore in its four listed entities to US-based global equity investment boutique GQG Partners.

Adani Enterprises sold shares worth Rs 5,460 crore, Adani Ports & SEZ sold shares worth Rs 5,282 crore, Adani Green Energy sold shares worth Rs 2,806 crore electricity distributor Adani Transmission sold shares worth Rs 1,898 crore stock.

Proceeds will be used for debt repayment and other purposes. High debt levels are a major concern for traders and investors. They have also been noted by US short-seller Hindenburg Research, which in a report, accused the group of stock manipulation and other misconduct, triggering a plunge in the conglomerate’s shares.

Bank shares fell on concerns over exposure to Adani Group. Some banks even had to ask for additional pledges as stock prices plummeted.

The Nifty Private Bank Index was also up 1.64%, led by HDFC Bank, ICICI Bank and Kotak Mahindra Bank.

Shares of the Adani group of companies rose sharply following the share sale. Adani Green Energy, Adani Total Gas, Adani Wilmar, Adani Power and Adani Transmission are locked at a cap of 5%. Adani Enterprises rose more than 11%.