December 8, 2023

Adani will concentrate on loan repayment rather than debt accumulation

4 min read
Adani Debt

Adani Group expects to report a 20 percent rise in its earnings before interest, tax, depreciation, and amortization (EBITDA) at Rs 61,200 crore for the year that ended in March 2023 (2022-23, or FY23), according to a note submitted by the Group to lenders recently. The Group had earned an EBITDA of Rs 57,299 crore in the preceding financial year that ended in March 2022 (2021-22).

The business, which has interests in everything, has produced a financial profits overview compendium for the fiscal year 2022-23 (FY23). These include:

  • ports and airports
  • energy production, transmission and distribution
  • edible oil and FMCG items
  • logistics, cement, and roads

The Group’s gross debt was Rs 2.27 trillion as of March 31, 2023, and it has said that it would only incur new debt once it has reduced its present one. According to a recent note provided to lenders and regulators on future estimates, net debt for 2022-FY23 was anticipated at Rs 1.95 trillion after it repaid Adani debt of Rs 23,590 crore the same year.

Adani Ports, a Group company, would use its resources to buy back bonds worth up to $300 million from investors during the current fiscal year.

There are no substantial short-term debt maturities outside of the credit envelope in the Adani debt case

A senior company executive of Adani Ports stated there was no considerable refinancing risk and near-term liquidity demand because there was no short-term significant debt maturity outside the credit envelope when approached. According to the company’s CEO, international and domestic rating agencies have confirmed ratings throughout the portfolio, indicating high-quality underlying credit quality. Adani Group shares were under pressure on January 23 this year after Hindenburg Research, a New York-based short-seller, accused the company of participating in “brazen stock manipulation and accounting fraud schemes over decades.”

The Group refuted the charges in the Adani debt case, pointing to Hindenburg’s conflict of interest because the short-seller held stakes in the business’s debt listed overseas. With the money from the study, the organization has sold stakes in four firms and prepaid debt totaling $3 billion.

The Group replies to rumours about partial payment in the Adani debt case

Adani Group stated it had completed the entire payback of $2.15 billion in margin-linked share-backed borrowing. In reaction to a media story questioning the conglomerate’s repayment of $2.15 billion in debt, the Adani Group labeled the charges “baseless and deliberately mischievous.” It highlighted that the Group had completed the entire payback of $2.15 billion in margin-linked share-backed borrowing. With the money from the study, the organization has sold stakes in four firms and prepaid debt totaling $3 billion.

Since the end-of-February lows, the Group’s equities have rebounded by 47%. According to the report, the Group’s total gross assets were Rs 3.91 trillion as of March 2023. The firm advised banks that it had continually diversified its long-term Adani debt portfolio and decreased its exposure to banks through alternative funding sources.

A summary of what the Adani Group claimed in response to the Adani debt case report

According to the report, the promoters’ share-backed facilities have all been paid off. Pledge positions for listed firms such as Adani Green, Adani Ports, Adani Transmission, and Adani Enterprises have been significantly reduced, with the remaining residual share promises of the operational company. There have been no new running corporate facilities available since the Hindenburg report. According to Ken, while Adani Group claimed to have returned around $2.15 billion, the lenders still need to release a significant percentage of the promoters’ shares.

It further stated that neither the corporation nor the lenders had made any disclosures about the situation. In response, the Adani Group noted in a March 12 press statement that all pledged shares had been released. According to the company, every share promise or release is disclosed using a system-driven disclosure (SDD) method, and no additional filing is necessary. The same was updated on the NSE but not on the BSE.

According to a March 12 declaration in the Adani debt case, Adani Group completed the entire payback of $2.15 billion in margin-linked share-backed financing well ahead of the stipulated March 31, 2023 deadline. It went on to suggest that the entrepreneurs had paid off Ambuja’s $500 million debt. The $2.65 billion prepayment was accomplished in six weeks. According to the report, following Adani’s prepayment announcement, only pledged shares of Adani Ports & SEZ were released.

It further stated that, despite the Group’s promises of “complete” payments, none of the promoters’ pledged shares except Adani Ports & SEZ had been released. Adani Group said that, according to SEBI, disclosure duties on pledges or releases of 5% or more are not applicable – except for Adani Ports & SEZ.

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