‘Adani Group’s debt will go up to Rs 2.6 lakh crore’
Analysts say that even though debt levels have risen, cash flows for the group have also risen sharply, with more assets coming in and operating. The recent acquisition by the Adani Group of cement maker Holcim’s India business is expected to add another Rs 40,000 crore to the group’s debt, making it around Rs. 2.6 trillions, an analysis by Credit Suisse showed.
The Gautam Adani-led conglomerate has increased its debt levels from Rs 1 trillion to Rs 2.2 trillion in the last five years, driven by expansion of ports business, investment in green energy, acquisitions of transmission business and new ventures. Is. Areas (Adani Enterprises) like airports, roads and data center. Analysts at Credit Suisse said that even though gross debt levels have risen, the group has managed to diversify its debt in favor of bonds and financial institutions. lenders with longer maturity tenors.
In terms of currency, approximately 30 % of the overall debt is denominated in foreign currency. Further, so the absolute level of Indian bank credit to Adani has remained stagnant over the past five years, reducing their share of the group’s total debt. significantly to just about 18 %.The analysts have pointed out that while debt levels may have gone up, the cash flows for the group have also grown steadily, with more assets comming on stream and becoming operational. Therefore, net debt/Ebitda at the group level has grown to around 5x in FY2012 as compared to a little less than 7.5x in FY16.
Overall, most of the group companies saw an increase in debt levels in FY12 as they continued to invest. However, barring Adani Transmission, the interest cover for these entities has remained stable along with improving operations. Adani Green has seen good improvement in asset management, and as a result, the sharp jump in debt has not affected the interest servicing capability of the firm.