Adani Group Cites Reduced Debt Load To Rebut Overleveraged View

Adani Group has said the leverage ratios of its companies "continue to be healthy and are in line with industry benchmarks"

The statement on Monday comes after CreditSights termed the empire built by Gautam Adani "deeply overleveraged" due to an expansion that "pressurised its credit metrics and cash flows."

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Adani Group said that its companies have reduced their debt burden as the conglomerate, backed by Asia’s richest person Gautam Adani, sought to rebut a report saying its finances had become stretched, Bloomberg said.

According to the report, using figures that differed from those cited by CreditSights in the report last month, Adani Group said the leverage ratios of its companies “continue to be healthy and are in line with industry benchmarks.”

"The companies have consistently de-levered," with the net debt to Ebitda ratio declining to 3.2 times from 7.6 times in the last nine years, the conglomerate said.

The statement on Monday comes after CreditSights, a Fitch Group unit, termed the empire built by billionaire Gautam Adani “deeply overleveraged” due to an expansion that “pressurised its credit metrics and cash flows.”

Adani (60) has spent the past few years expanding his coal-to-ports conglomerate, venturing into everything from data centers to cement, media and alumina. The group now owns India’s largest private-sector port and airport operator, city-gas distributor and coal miner.

Adani also pledged to invest $70 billion in green energy to become the world’s largest renewable-energy producer.

Monday’s report listed Adani Enterprises as having a ratio of earnings before interest, taxes, depreciation and amortization (Ebitda) to gross interest of 1.98. CreditSights listed a figure of 1.6. It also cited metrics such as the share of debt to equity, which Adani did not refer to.

Meanwhile, Nomura Holdings has said that a key credit metric of Adani Green Energy that ballooned as the firm’s billionaire-owner took on more debt will show withdraw in leverage.

According to a report, Eric Liu, credit desk analyst at Nomura Holdings in Hong Kong, said the Abu Dhabi-based International Holding Co. (IHC) has injected $500 million into Gautam Adani’s green firm that will help stabilise its debt-to-capital ratio in the low 60 per cent range from 95.3 per cent at the end of March.