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Gautam Adani: Companies of Gautam Adani are in debt? Know what the Adani group said in the cleanup

Adani Group Debt: The Adani Group, headed by Gautam Adani, the world’s third-largest rich and the country’s richest industrialist, has rubbished fears being raised about being in huge debt. Adani Group has said that its net debt to operating profit ratio has improved and it has repaid more than half of the loans taken from public sector banks.

Adani Group issued a note of 15 pages – information about the loan
Adani Group has issued a 15-page note in response to the Creditsites report about being in excessive debt. In this, the group said that its companies have consistently repaid their debt and the ratio of debt to interest, tax, tax before income or EBITDA income has come down to 3.2 times from 7.6 times nine years ago.

According to this note, “Adani Group’s businesses operate on a simple yet robust and repeatable business model with a focus on growth and generation, operations and management and capital management planning.” Considering the cash available with the Adani Group, it had a gross debt of Rs 1.88 lakh crore and a net debt of Rs 1.61 lakh crore in March 2022.

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Loan taken from public sector banks came down from 55 percent to 21 percent
The Adani Group said that in the financial year 2015-16, the proportion of loans taken from public banks in the total debt of its companies was 55 percent, but in the financial year 2021-22, it came down to just 21 percent of the total debt. In the financial year 2015-16, the share of loans taken from private banks used to be 31 percent in the total loan, which has now come down to 11 percent. In contrast, the share of debt raised through bonds has increased from 14 per cent to 50 per cent during this period.

Adani Group is in heavy debt as per reports by Creditsites
Fitch Group firm Creditsites had said in a report released last month that the Adani Group was in heavy debt. He said that the Adani Group is using that amount to expand its existing business and set up new businesses by taking massive loans. CreditSites also feared that if the situation worsens, the group’s debt-backed business plans could sink into a huge debt trap and result in debt repayment defaults of one or more companies.

Adani Group replied
The reference said on behalf of the group, “The companies included in the portfolio have expanded at an industry-beating rate over the past decade. In doing so, our companies have consistently driven down the net debt to EBITDA earnings ratio.” It has worked. In the last nine years, EBITDA earnings have grown at a rate of 22 per cent per annum, while the growth rate of credit has been only 11 per cent. In the Creditsites report, Adani Enterprises’ EBITDA earnings ratio was given as 1.6, while the group put it at 1.98.

Loan Ratio is as per Industry Standards – Adani Group
Adani Group, using data other than those provided by CreditSights, has said that the debt ratio of its companies remains healthy and is in line with industry standards. “Over the past 10 years, we have continuously worked to improve our debt standards through our capital management strategy,” the group said.

Adani Group Expansion
Adani Group has expanded its business very rapidly in the last few years. The group operates in various business sectors such as coal mining, ports, airports, data centers, cement, aluminum and city gas distribution.

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