Prepayment program and improved financial metrics mark Adani Group’s efforts towards reducing leverage and enhancing liquidity
In a strategic move to strengthen its financial position and regain investor confidence, the Adani Group has successfully repaid loans worth $2.65 billion through a comprehensive prepayment program. The initiative aimed to reduce overall leverage and address concerns raised in a critical report by a US short seller. The repayment program includes a full prepayment of $2.15 billion of loans backed by shares in the group’s listed firms, as well as an additional $700 million in loans associated with the acquisition of Ambuja Cement.
As part of the prepayment program, the Adani Group has also settled an interest payment of $203 million. Furthermore, the group’s promoters completed the sale of shares in four listed entities to GQG Partners, a globally recognized investment firm, for a total of $1.87 billion. This move highlights the Adani Group’s commitment to deleveraging and improving its financial health.
The recent credit note released by the Adani Group emphasizes the positive impact of the prepayment program on key financial metrics. The portfolio’s combined net debt to EBITDA ratio has witnessed a notable improvement, decreasing from 3.81 in FY22 to 3.27 in FY23. Additionally, the group’s run rate EBITDA has surged from Rs 50,706 crore in FY22 to Rs 66,566 crore in FY23.
The successful implementation of the prepayment program showcases the Adani Group’s robust liquidity management and capital access, even in challenging market conditions. These actions supplement the group’s commitment to maintaining solid capital prudence across all its portfolio companies.
Adani Group firmly denies all allegations made by US short seller Hindenburg Research, emphasising its dedication to transparency and adherence to regulatory compliance. Despite the allegations, the credit update highlights the unwavering confidence of banking institutions, as they continue to disburse new debt and roll over existing lines of credit for the Adani Group. Furthermore, both domestic and international rating agencies have reaffirmed their ratings for all group companies, reflecting the market’s confidence in their financial stability.
The credit update also reveals that the Adani Group has achieved significant growth in gross assets despite the deleveraging efforts. Gross assets have increased to Rs 4.23 lakh crore, indicating an impressive rise of Rs 1.06 lakh crore.
The Adani Group’s proactive measures to repay loans, improve financial metrics, and strengthen liquidity demonstrate its commitment to long-term sustainability and rebuilding investor trust. These actions reflect the group’s robust operational performance and the effectiveness of its strategic initiatives. As the Adani Group continues to navigate market dynamics and capitalise on growth opportunities, it remains dedicated to maintaining a strong financial foundation and delivering value to its stakeholders.
