New Delhi:
There was a significant rise in the shares of Adani Group companies on Monday, which has made it clear that the market is not at all perturbed by the recent allegations made in America and investors’ confidence in the group remains intact. Almost all the companies of Adani Group are seen in the green in the stock market, of which Adani Energy, Adani Green Energy and Adani Total Gas are prominent. Along with this, the details of its cash flow, debt and earnings made public by the group in the last 12 months are a befitting reply to the domestic and foreign organizations raising questions on the group.
Adani Group’s fundamentals strong
The 12 month report presented by the group made it clear that the financial condition of the group is strong. The group’s debt reliance is also reasonable given the solid growth in EBITDA and strong cash flows. It is noteworthy that if we look at the financial indicators indicating the debt condition, Adani Group’s net debt-to-EBITDA ratio is 2.46x, whereas its guidance was 3.5x-4.5x. Additionally, gross assets to total debt stood at 2.7x, compared to 2.6x during the previous financial year.
More than 30% increase in cash flow over 5 years
The group’s EBITDA has grown by 17 per cent to Rs 83,440 crore in the last 12 months. Additionally, the group’s funds flow from operations (FFO) or cash profit in the last 12 months stood at ₹58908 crore, and has been growing by more than 30 per cent over the last five years. This means that the group has sufficient funds to service all its debts, and the group can repay the entire debt in just three years using its existing annual cash flows alone.
Even if there is no progress, you will repay the entire loan in 10 years.
The group’s strong financial position can also be gauged from the fact that even assuming no growth, the group is projected to raise ₹5.9 lakh crore from cash flow internally over the next 10 years alone. Can invest, and this will greatly reduce the dependence on external debt.
Adani Group’s assets increased more than its debt.
In the first half of the financial year 2024-25, the group’s assets have increased more than its debts. As against the increase in gross assets of US$51 billion, the group’s total debts have increased by only US$2 billion. Equity accounts for nearly two-thirds of the group’s total assets, a complete reversal from five years ago. In the first half of the financial year, the group’s debt has increased by only ₹ 16882 crore, while the investment has been about ₹ 75227 crore. The group’s asset base has also grown to ₹5.5 lakh crore, and the average cost of borrowing at 8.2 per cent is the lowest in the last five years due to improvement in the ‘rating’ (creditworthiness) of the group companies. Of the total debt taken by the group, the loan taken from Indian banks is 42 percent, and that amount is only 11 billion US dollars, whereas the group also has cash deposits of six billion dollars in Indian banks. Borrowings from global banks constitute 27 percent of the total debt.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
