Adani Group touts enough cash, profit to service debts in coming decade

By P R Sanjai and Divya Patil

Adani Group said cash and profit generated from its sprawling infrastructure business can cover all the debt maturing each year in the coming decade, as billionaire Gautam Adani tries to restore investor confidence days before India’s markets regulator is due to submit findings from a probe into the group’s alleged wrongdoings.
 

In a credit report released Thursday, the power-to-port conglomerate said its cash flow generated from business operation and balances stood at 778.9 billion rupees ($9.4 billion) by the end of March. That provides enough liquidity for the company to cover debts that will mature within a year. 

Nearly 60% of its debts were from banks, while the rest are bonds raised from both India and offshore markets. International lenders saw their share in the Adani’s total bank credit jump to 28% from 18% a year ago. The group total debt stood at 2.3 trillion rupees in end-March, up from 1.89 trillion rupees a year earlier. 

On Wednesday, the conglomerate said it posted record profit in the quarter ended June on the back of its infrastructure and renewable energy businesses. 

Adani Group's Debt Maturity Profile
 

Showcasing a stronger cash position and bumper earnings underscores the continued effort by the embattled conglomerate to get over from the damaging short seller report released in January by Hindenburg Research. The US short seller accused the company of widespread corporate malfeasance — allegations that wiped out at one point more than $150 billion in value from its listed companies but has also been vehemently denied by Adani.

The company’s disclosure of improved debt servicing capabilities comes at a time when investors are waiting for a finding from Indian markets watchdog Securities and Exchange Board of India that has looked into some of the allegations made by Hindenburg. Sebi has asked the nation’s Supreme Court for an extension to wrap up its probe by the end of August.

Other Salient Features From Credit Report

Around 64% of total term debt has a leverage ratio range of 0x – 3.0x
 

86% of overall EBITDA contributing by infrastructure businesses including energy and utility and transport and logistics verticals
 

Cash stood at 421.15 billion rupees as on June 30 – up 17.64 billion rupees in the previous quarter
 

Adani portfolio companies reported EBITDA CAGR of 23.16% over the past five years