New Delhi: Billionaire Gautam Adani’s beleaguered group said its balance sheet is “very healthy” and is laser-focused on continuing business momentum, as it reassures investors the group despite a share rout caused by a damning report by a US short-seller. assures to keep the faith in , Group CFO Jugeshinder (Robbie) Singh said in the earnings call that the group has full confidence in its internal controls, compliance and corporate governance. Separately, it issued a compendium of group companies, highlighting that it has adequate cash reserves and the ability to refinance debt.
“Our balance sheet is very strong. We have industry-leading growth capabilities, strong corporate governance, secure assets and strong cash flows,” Singh said. “Once the current market stabilizes, we will review our capital markets strategy, but rest assured that we are confident in our ability to continue to grow a business that provides superior returns to shareholders.”
The group has been under pressure ever since Hindenburg Research accused the group of accounting fraud and stock manipulation on January 24, allegations the group denies as “malicious”, “baseless” and a “planned attack on India”. The group’s listed companies lost over $125 billion in market value in three weeks. Shares of most of the group companies rose on Wednesday.
“We are focused on continuing the momentum of our business amid these volatile market conditions,” Singh said. “We are confident in our internal controls, compliance and corporate governance.”
Adani Group’s gross debt stood at Rs 2.26 lakh crore as of September 2022 and had cash of Rs 31,646 crore. “Our businesses operate on long-term annuity contracts and generate assured and consistent cash flows without any market risk,” the credit report said. Despite the port-to-energy group denying the allegations, the report triggered a massive sell-off in shares of the group’s firms.
“The current volatility in the market is temporary,” Adani said in the earnings statement of group flagship Adani Enterprises Ltd (AEL) on Tuesday. “As a classical incubator with a vision of long-term value creation, Adani Enterprises will continue to operate with the twin objectives of achieving moderate leverage and looking for strategic opportunities for expansion and growth.”
Adani said the group’s fundamental strength lies in mega-scale infrastructure project execution capabilities, organizational development and exceptional O&M management skills at par with the best in the world. In the earnings call, the group CFO expanded on his chairman’s comments.
He said, AEL has a proven track record of 25 years of deploying capital in a disciplined manner to create value for shareholders. “During this time, we have given birth to leaders in sectors that are critical to India’s continued growth and economic prosperity – companies such as Adani Ports, Adani Transmission, Adani Green Energy, Adani Total Gas and Adani Wilmar.”
It is now developing new energy, data centres, airports and road transport businesses, which together contribute more than 33 per cent to AEL’s EBITDA.
On the withdrawal of the fully subscribed follow-on shares of AEL, Singh said it was due to the unprecedented market and stock price volatility that took place after the Hindenburg Report. “The decision not to proceed with the FPO will not adversely affect our current operations and future plans.”
“We have an impeccable track record of responsibly managing our balance sheet. We are the undisputed leader in executing complex infrastructure projects,” he said, adding that in the early stages of a new project, leverage increases, its The latter results in strong cash flow. fast withdrawal.
Last week, Moody’s Investors Service cited concerns about Adani’s ability to raise capital or refinance debt in the coming years, while S&P Global Ratings downgraded companies including Adani Ports and Special Economic Zone Ltd. and Adani Electricity Mumbai Ltd. Cut rating outlook for four group firms. stable to negative. S&P had said, “There is a risk that investors are concerned about the group’s governance and disclosures is currently larger than is factored into our ratings.”
In August last year, CreditSights, a unit of the Fitch Group, described the conglomerate that expands ports to electricity, city gas and cement, as having “profits over depth”. The Adani Group had disputed CreditSight’s assessment.