Adani Group’s gross debt increases 42% to ₹2.22 lakh crore: Report
The Adani Group is one of the most indebted among India’s top business houses as the combined gross debt hit a new high of ₹2.22 lakh crore by March-end, according to a report.
The combined gross debt of the group companies was up 42% from ₹1.57 lakh crore a year ago, according to data from Capitaline. The group continues to use debt financing to grow its existing businesses and enter new industries, a Business Standard report said on Wednesday (May 18).
Also read: From airports to sports to water, a look at Adani’s expanding business list
As a result, the group’s gross debt-to-equity ratio was at a four-year high of 2.36 at the end of March, up from 2.02 a year ago and a low of 1.98 at the end of FY19, it added.
According to the report, “Adjusted for cash and bank balance available with various group companies, the group’s net debt-to-equity ratio rose to 2.07 at the end of FY22, the highest since FY18. As of March-end, the Adani group companies were sitting on cash and bank balance worth ₹26,989 crore. This makes the Adani group one of the most indebted among India’s top business groups.”
The latest data shows that Indian banks have a sizeable amount of loans given to this one group.
Also read: No tax on $6.38 bn transaction with Adani Group, says Holcim
On May 15, the group, led by Asia’s richest person Gautam Adani, entered the into another new business – cement, as it acquired the Switzerland-based Holcim, which through its subsidiaries, holds 63.19% in Ambuja Cements and 54.53% in ACC (of which 50.05% is held through Ambuja Cements).
The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is $10.5 billion (₹81,361 crore), which makes this the largest ever acquisition by Adani, and India’s largest-ever mergers and acquisitions (M&A) transaction in the infrastructure and materials space.
The group, founded in 1988, started with a commodity trading business and has diversified into various sectors including energy and utilities, transportation and logistics, defence and aerospace, airports, water, road, metro and rail, edible oils and food, sports, real estate, financial services, housing finance.
According to the group’s website, “Adani Group is a diversified organisation in India with a market cap of over $183.83 billion (as of May 16) comprising seven publicly traded companies.”
Last year, senior BJP leader and MP Subramanian Swamy had alleged that Adani owes ₹4.5 lakh crore as NPA to banks, and questioned how his wealth was “doubling” every two years since 2016.
“Trapeze Artist Adani now owes Rs. 4.5 lakh crores as NPA to banks. Correct me if I am wrong. Yet his wealth is doubling every two years since 2016. Why can’t he repay the banks? May be like with the six airports he has bought he might soon buy out all the banks he owes money,” Swamy had tweeted in January 2021.
Trapeze Artist Adani now owes Rs. 4.5 lakh crores as NPA to banks. Correct me if I am wrong. Yet his wealth is doubling every two years since 2016. Why can’t he repay the banks? May be like with the six airports he has bought he might soon buy out all the banks he owes money.
— Subramanian Swamy (@Swamy39) January 15, 2021
The group dismissed the allegations and said it has “an impeccable record of not a single NPA in three decades.
“The Adani Group strongly objects to a factually incorrect tweet posted by Mr. Subramanian Swamy… Firstly, the group maintains an impeccable record of not a single NPA in the three decades of its existence. The tweet quotes an incorrect and fictitious number… our credit quality has consistently enhanced and the net debt to EBITDA ratio is less than 4, which demonstrates high credit ratings quality and almost all of our businesses enjoy a high credit rating from international and domestic rating agencies,” the group tweeted in response to Swamy’s post.
Here’s our official response to the Honorable MP in Rajya Sabha @Swamy39‘s tweet. https://t.co/Kn9xZUszEb pic.twitter.com/I6O6Ne705c
— Adani Group (@AdaniOnline) January 16, 2021
