The group had a net debt of ₹1.61 lakh crore in March 2022 after considering gross debt of ₹1.88 lakh crore and cash balances.
The group had a net debt of ₹1.61 lakh crore in March 2022 after considering gross debt of ₹1.88 lakh crore and cash balances.
Richest Indian Gautam Adani’s conglomerate has cited an improvement in the net debt to operating profit ratio and halving of public sector banks (PSBs) loans to allay concerns about its higher profits.
In a 15-page note in response to CreditSite’s report calls the group over-leveragedIt said the group companies have consistently de-leveraged, with the net debt and EBITDA ratio declining from 7.6 times to 3.2 times over the past nine years.
“Work on a simple yet robust and repeatable business model focused on business growth and origination, operations and management and capital management planning,” the note reviewed by PTI said.
The group had a net debt of ₹1.61 lakh crore in March 2022 after considering gross debt of ₹1.88 lakh crore and cash balances.
While loans from public sector banks accounted for 55% of all loans to group firms in 2015-16, in 2021-22, borrowings from public sector banks accounted for 21% of all loans, it said.
In FY 2016, private banks had 31% loans, which has now come down to 11%. Funds raised through bonds have increased from 14% of all loans to 50% now.
CreditSights, a Fitch Group firm, said last month in a report titled ‘Adani Group: Deeply Overleveraged’ that the port-to-power-to-cement conglomerate is “deeply over-leveraged”, primarily using debt. Invests aggressively. existing as well as new businesses.
“In a worst-case scenario, overly ambitious debt-funded development plans may eventually spiral into a large debt trap, and possibly end in a crisis situation or the default of one or more group companies,” it had said. .
Adani (60) has over the years expanded its coal-to-ports group into airports, data centers, cement, aluminum and city gas.
“Adani portfolio companies have successfully and repeatedly implemented industry-beating expansion plans over the past decade.
“In doing so, companies have reduced the portfolio net debt to EBITDA ratio from 7.6x to 3.2x, EBITDA has grown by 22% CAGR over the last 9 years and debt has grown by only 11% CAGR over the same period,” the group he said.
Using figures different from those quoted by CreditSights in last month’s report, the Adani Group said the leverage ratios of its companies “remain healthy and in line with industry benchmarks”.
“Over the past 10 years, we have actively worked to improve our debt metrics through our capital management strategy,” it said.
The group has raised $16 billion through “comprehensive equity” as part of a systemic capital management plan for half a dozen group firms over the past three years. They were raised through a combination of primary, secondary and committed equities from global investors, including TotalEnergies, Abu Dhabi-based international holding company PJSC, QIA and Warburg Pincus.
“The result is also to reduce promoter level debt, thereby reducing the pledging of promoter’s stake in listed companies,” the note said.
It listed Adani Enterprises as an earnings before interest, taxes, depreciation and amortization (Ebitda) ratio of 1.98 to gross interest, while CreditSights listed a figure of 1.6.