New Delhi:
Billionaire businessman Gautam Adani’s group has presented financial and credit statements of its portfolio companies, demonstrating their strong profits and cash flows, which have enabled them to continue growing without dependence on external debt.
The port-to-energy conglomerate, in a presentation to investors on Monday, highlighted its consistently growing profits and liquidity, which have helped the group reduce its debt reliance over time to fuel its growth aspirations. .
A note to investors was also shared with the presentation, outlining the group’s liquidity position, saying, “Adani portfolio companies have sufficient liquidity to meet all borrowing requirements for at least 12 months.. As of September 30, 2024, Adani portfolio companies had cash of ₹ 53024 crore, which is about 21 percent of its total outstanding debt…” Note. It was said that this amount is enough to meet the loan repayment requirement for the next 28 months.
progress without debt
Recently, Adani Group had announced plans to invest more than ₹ 8 lakh crore (US$ 100 billion) in portfolio companies in the next 10 years. Funds flow from operations (FFO) or cash profit from operations stood at ₹58908 crore in the last 12 months, and have grown by more than 30 per cent in the last five years. On this basis, even if there is a forecast of no growth, Adani Group will be able to invest ₹ 5.9 lakh crore in the next 10 years only with internally generated cash, which will reduce the dependence on external debt.
Additionally, there is very low debt gearing of 2.46x at the portfolio level – which means there is massive headroom for debt, according to the presentation. Other highlights of the presentation included EBITDA (earnings before interest tax and depreciation) for the last 12 months, which it said was highly stable and therefore predictable due to its infrastructure projects, which It increased by 17 percent to ₹ 83440 crore. Additionally, the current annual cash flow alone can repay the entire loan in three years.
Gross assets/investments increased by ₹75227 crore, while total debt increased by only ₹16882 crore. The asset base has now increased to ₹5.5 lakh crore. Due to improvement in the rating of group companies, the average cost of borrowing is the lowest in the last five years at 8.2 per cent.
Adani Group’s long-term loan from domestic banks is ₹94400 crore. In comparison, there was a cash balance of ₹ 53024 crore, most of which was deposited with Indian banks. Borrowings from global banks constitute 27 percent of the total debt.
