Adani Group says it has ample liquidity and assures investors of repaying debt

New Delhi, Nov 25 (PTI) Billionaire Gautam Adani’s conglomerate on Monday showcased its cash reserves and profits, enough to repay debt and meet growth plans, as it emerged despite US bribery offer to founder charges, but the company assured investors that it was business as usual.

The port energy group, whose chairman Adani and two other executives were indicted in a U.S. court for allegedly bribing Indian officials to secure solar contracts, highlighted its cash balance in a presentation to investors $This exceeds long-term debt repayments in the next 28 months by Rs 55,024 crore.

Equity now accounts for almost two-thirds of its total asset creation, a sharp contrast to five years ago. In the past six months, the group has invested nearly $Total debt increased by only Rs 75,227 crore $16,882 Crores.

Along with the presentation, a note was also shared with investors.

The report outlined the group’s liquidity position, saying “Adani portfolio companies have sufficient liquidity to meet all debt service requirements for at least 12 months. As of September 30, 2024, Adani portfolio companies had cash $53,024 crore, which is close to 21% of the total outstanding debt. “

The company said this amount is sufficient to meet its debt service needs for the next 28 months.

debt free growth

In the past, the group has announced plans to invest more than $Investments in portfolio companies will reach 8 billion rupees ($100 billion) over the next 10 years.

Funds flow from operations (FFO) or cash profit is $58,908 crore in the past 12 months, a growth of over 30% in the past five years. On this basis, the group will be able to invest even assuming no growth $Rs 5.9 billion comes only from internal cash accruals over the next 10 years, with little reliance on external debt.

Additionally, at the portfolio level, the debt-to-gear ratio is 2.46 times, which means it has huge debt headroom, according to the presentation.

Other highlights from the presentation included trailing 12-month EBITDA (earnings before interest, taxes and depreciation), which the company described as highly stable and therefore predictable due to its infrastructure projects, grew 17% to $83,440 Crores.

Existing annual cash flow alone could repay the entire debt within three years.

Increase in total assets or investments $Total debt increased by only Rs 75,227 crore $16,882 Crores. The asset base has now increased to $550 Crores.

The report said that due to the upgrade of the group company’s rating, the average borrowing cost was 8.2%, the lowest in five years.

Adani Group’s long-term debt from domestic banks is $94,400 Crores. This is the same as the cash balance $53,024 crore, most of which is deposited in Indian banks.

Borrowings from global banks account for 27% of total debt.

Adani said 62% of its total revenue and 87% of its earnings before interest, taxes, depreciation and amortization (EBITDA) came from its core infrastructure business.

EBITDA net gearing was 2.46 times, compared with guidance of 3.5 times to 4.5 times. In addition, in the first half of this fiscal year, its total assets to net debt ratio improved to 2.7 times from 2.63 times in the previous year.

funds

The Adani Group’s presentation to investors comes as the United States indicts its founder chairman Gautam Adani and seven others, including his nephew Sagar, for their role in an alleged $265 million bribery plans to raise funds overseas.

Some global banks and financial institutions are reportedly considering temporarily halting new credit to the group.

Last week, S&P Ratings said it would closely monitor any signs of weakening or concerns about existing lenders’ funding access, which could be evidenced by lowering funding limits, not renewing loans or sharply increasing credit spreads.

Shares and bond prices of Adani Group companies fell sharply after the indictment was announced.

The group canceled a completed $600 million bond issuance.

The indictment is separate from a short-selling report last year that hit stock and bond prices across the group, although they have since recovered.

The group has denied all allegations made by U.S. short seller Hindenburg Research and dismissed the allegations in the U.S. indictment as baseless and said it would pursue all possible legal recourse.

Its chief financial officer Jugeshinder Robbie Singh said on Saturday the group would respond to the U.S. allegations after reviewing legal documents in detail and taking advice from its lawyers.