Adani Group Completes $2.65 Bn Deleveraging Program

Adani Group released a credit update on its group portfolio on Monday.

Net debt to Gross assets is now over 2.25 times thus at debt to asset in percentage gearing is now below 50 per cent. Debt service cover at aggregate portfolio level now exceeds 2 times and cash balance at listed portfolio is now over Rs 40,351 crore.

EBITDA of Rs 57,219 crore, up 36.2 per cent year-on-year. RR EBITDA of Rs 66,566 crore for FY23, up 31.3 per cent year-on-year. Core Infra constitutes 83 per cent of the portfolio EBITDA providing resiliency, stability and high predictability to the cash flow given majority of projects are largely contracted.

Portfolio’s combined Net Debt/RR EBITDA improved to 2.81 times in FY23 from 3.16 times in FY22. Debt Service Cover Ratio (DSCR) has improved to 2.02 times during FY23 from 1.47 times during FY22.

Gross Assets increased to Rs 4.23 lakh crore, up by Rs 1.06 lakh crore. Gross Asset/Net Debt cover has improved to 2.26 times in FY23 from 1.98 times FY22.

Continued investments in Core Infra with Gross Assets of Rs 3.77 lakh crore (89 per cent of the portfolio) which provides long term multi decadal visibility of Cash Flow.

Cash balance higher by 41.5 per cent at Rs 40,351 crore against Rs 28,519 crore.

Key Highlights of the Adani Portfolio credit update:

The Group has made a full prepayment of margin linked share backed financing totalling USD 2.15 billion before 12 March, well in advance of the 31 March 2023 timeline. The promoters also prepaid USD 700 million debt taken for the Ambuja Cement acquisition. The prepayment was done along with interest payment of USD 203 million. Further, the credit update states that the promoters completed a secondary transaction with GQG Partners, a leading global investment firm, of USD 1.87 billion for four key listed entities. 

“The deleveraging program testifies the strong liquidity management and capital access at sponsor level even in volatile market condition, supplementing the solid capital prudency adopted at all portfolio companies,” said the Adani Group in the credit update. 

The comprehensive credit update further highlights major improvements in key financial metrics. Firstly, the portfolio's combined net debt to EBITDA ratio showed considerable progress decreasing from 3.81 in FY22 to 3.27 in FY23. The run rate EBITDA surged from Rs 50,706 crore in FY22 to Rs 66,566 crore in FY23. As a result, Net Debt/RR EBITDA was as low as 2.8 times. Run Rate (RR) considers annualised EBITDA from projects that commissioned during the year.

The credit update further states that the banking lines of Adani Group continue to show confidence by disbursing new debt and rolling over existing lines of credit. Moreover, rating agencies both domestic and international rating agencies have reaffirmed their ratings in all the group companies.