Global Rating Agencies Raised Questions About Huge Corporate Indebtedness: Adani Group Shut Up Like This Global Rating Agencies Raised Questions About Huge Corporate Indebtedness

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Adani Group released a 15-page note – loan information
Adani Group issued a 15-page memo in response to Creditsites report on over-indebtedness. In it, the group said that its companies had systematically paid off their debt and that the ratio of debt to interest, taxes, taxes before income or Ebitda income had fallen to 3.2 times against 7.6 times it nine years ago.

Total debt is 1.88 lakh crore According to the note, “Adani Group’s business operates on a simple yet robust and repeatable business model, focused on growth and production, operations and management, and capital management planning.” Considering the available cash 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 as of March 2022.

Loans from public sector banks fell from 55% to 21%
The Adani Group said that the proportion of loans from public banks in the total debt of its companies stood at 55% in the financial year 2015-2016, but that in the financial year 2021-22 , it was only 21%. of total debt. In FY 2015-2016, the share of loans from private banks was 31% in total lending, which has now fallen to 11%. In contrast, the share of debt contracted through bonds rose from 14% to 50% during this period.

Adani Group is heavily in debt according to reports from Creditsites
The Fitch Group’s Creditsites said in a report released last month that the Adani Group was heavily indebted. He said the Adani Group is using the amount to expand its existing business and create new businesses by taking out massive loans. CreditSites also feared that if the situation worsened, the group’s debt-backed business plans could fall into a huge debt trap and lead to debt defaults by one or more companies.

Adani Group replied
The benchmark said on behalf of the group: “Portfolio companies have grown at a rate that has outstripped the industry over the past decade. In doing so, our businesses have consistently reduced the net debt to EBITDA ratio. ” It worked. Over the past nine years, EBITDA revenue has grown 22% annually, while credit growth has been 11%. The Creditsites report puts Adani Enterprises’ EBITDA earnings ratio at 1.6, while the group pegs it at 1.98.

Loan ratio is in line with industry standards – Adani Group
Adani Group, using data other than that provided by Creditsites, said its corporate debt ratios remain healthy and in line with industry standards. “Over the past 10 years, we have continuously worked to improve our leverage standards through our capital management strategy,” the group said.

Expansion of Adani Group
Adani Group has developed its business very rapidly over the past few years. The group operates in a wide range of business sectors such as coal mines, ports, airports, data centers, cement, aluminum and town gas distribution.

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