Key Debt Ratio Of Adani Green Is Set To Improve, Says Nomura Holdings

Abu Dhabi-based International Holding Co has invested nearly $2 billion in total in three companies owned by Adani Group

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, Bloomberg said.

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. IHC’s support "will be reflective when the company unveils its second quarter balance sheet details,” Liu said, noting that the infusion of funds shows Adani Green’s equity-raising capability.

IHC has invested nearly $2 billion in total in three companies owned by Adani Group. Second quarter financial results are expected around November, the report stated.

Adani Group has committed to invest a total of $70 billion by 2030 across its green energy value chain to become the world’s largest renewable energy producer. That makes Adani a key player in India’s quest to become carbon net-zero by 2070. Still, Adani Green is one of the most leveraged companies in the conglomerate, with Asia’s second-worst debt-to-equity ratio of 2,021 per cent.

Though Liu said the Adani Group’s aggressive expansion is a "negative overhang for credit investors as much of the M&A recently has been debt-funded," he noted that the conglomerate has demonstrated prowess at locking down external investors to shore up capital.

Meanwhile, last week Adani Group’s media subsidiary said that it would acquire a 29.18 per cent stake in New Delhi Television Ltd (NDTV). The group’s media arm will also make an open offer to acquire another 26 per cent of the shares in NDTV.

Adani Group said that the acquisition of 29.18 per cent stake will be indirect and it will be made through Vishvapradhan Commercial Pvt Ltd (VCPL), a wholly-owned subsidiary of AMG Media Network Ltd (AMNL), owned by Adani Enterprises Ltd (AEL).

Adani Group has also bagged necessary regulatory approval for Rs 30,100 crore ($3.8 billion) open offer to acquire remaining shares of two Indian cement makers, Bloomberg reported.

Cement major Holcim Ltd.’s a few months ago decided to sell its majority stake in May to the Adani Group.