Richest Indian Gautam Adani’s conglomerate has cited an improved web debt to working revenue ratio and greater than halving of loans from public sector banks to allay considerations about it being overleveraged.
In a 15-page be aware in response to CreditSights report calling the group overleveraged, it mentioned corporations within the group have constantly de-levered, with the online debt to Ebitda ratio declining to three.2 instances from 7.6 instances within the final 9 years.
“The companies function on a easy but strong and repeatable enterprise mannequin centered on growth and origination, operations and administration and capital administration plan,” the be aware, reviewed by PTI, mentioned.
The group had a gross debt of Rs 1.88 lakh crore in March 2022 and web debt of Rs 1.61 lakh crore after contemplating the money stability.
Whereas loans from public sector banks in 2015-16 accounted for 55 per cent of all debt of the group companies, in 2021-22, borrowing from PSBs made up for 21 per cent of all debt, it mentioned.
In FY2016, non-public banks accounted for 31 per cent of loans, which has now shrunk to 11 per cent. Cash raised by way of bonds has jumped from 14 per cent of all loans to account for 50 per cent now.
In a report titled ‘Adani Group: Deeply Overleveraged’, CreditSights, a Fitch group agency, had final month said that the ports-to-power-to-cement conglomerate is “deeply overleveraged” with the group predominantly utilizing debt to take a position aggressively throughout current in addition to new companies.
“Within the worst-case state of affairs, overly bold debt-funded development plans might finally spiral into a large debt lure, and presumably culminate right into a distressed scenario or default of a number of group corporations,” it had mentioned.
Adani, 60, has in the previous couple of years expanded his coal-to-ports conglomerate into airports, information centres, cement, aluminium and metropolis gasoline.
“Adani portfolio corporations have efficiently and repeatedly executed an industry-beating growth plan over the previous decade.
“Whereas doing so, the businesses have constantly de-levered with portfolio web debt to EBITDA ratio coming down from 7.6x to three.2x, EBITDA has grown 22 per cent CAGR within the final 9 years and debt has solely grown by 11 per cent CAGR throughout the identical interval,” the group mentioned.
Utilizing figures that differed from these cited by CreditSights within the report final month, Adani Group mentioned the leverage ratios of its corporations “proceed to be wholesome and are in step with {industry} benchmarks”.
“During the last 10 years, we’ve actively labored to enhance our debt metrics by way of our capital administration technique,” it mentioned.
The group has raised USD 16 billion by way of “complete fairness” below a systemic capital administration plan for half a dozen group companies over the previous three years. They have been raised by way of a mix of major, secondary and dedicated fairness from world buyers, together with TotalEnergies, Abu Dhabi-based Worldwide Holding Firm PJSC, QIA and Warburg Pincus.
“This has additionally resulted within the deleveraging of the promoter degree debt, permitting the discount within the promoter stake pledge within the listed corporations,” the be aware mentioned.
It listed Adani Enterprises as having a ratio of earnings earlier than curiosity, taxes, depreciation and amortization (Ebitda) to the gross curiosity of 1.98, whereas CreditSights listed a determine of 1.6.
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