Adani Group, India’s most significant critical infrastructure developer, has exhibited robust financial strength and operational acumen as it successfully accomplished a deleveraging programme worth $2.65 billion. This impressive achievement, marked by repaying loans and cutting overall leverage, is part of the group’s concerted strategy to rebuild investor trust following a recent challenging period.
The substantial prepayment included a $2.15 billion full reimbursement of loans secured against the conglomerate’s listed firms, and an additional $700 million linked to the Ambuja Cement acquisition. Accompanied by an interest payment of $203 million, these repayments have notably been accomplished well ahead of the March 2023 deadline, signalling the Group’s proactive and confident approach. “The deleveraging programme testifies to the strong liquidity management and capital access at sponsor level even in volatile market conditions, supplementing the solid capital prudence adopted at all portfolio companies,” affirmed the Adani Group in a credit update. This landmark announcement resonates positively within the investment community, bolstering investor trust.
In a noteworthy development, Adani’s promoters completed the sale of shares in four listed group entities to GQG Partners, a prominent global investment firm. This strategic transaction, valued at $1.87 billion, indicates the group’s agility and resilience in adapting to market dynamics. The Adani Group’s credit update also highlights significant improvements in vital financial metrics. The combined Net Debt to EBITDA ratio for the portfolio displayed marked progress, reducing from 3.81 in FY22 to 3.27 in FY23. Concurrently, the run rate EBITDA increased from INR 50,706 crore in FY22 to INR 66,566 crore in FY23, demonstrating robust financial growth and management.
Despite challenges, the banking lines of the Adani Group continue to show strong confidence by disbursing new debt and rolling over existing lines of credit. This trust is further backed by domestic and international rating agencies, who have reaffirmed their ratings in all the group companies, reinforcing the group’s standing in the financial market.
Impressively, the group’s gross assets grew while maintaining a rapid deleveraging process. The overall assets increased to INR 4.23 lakh crore, showcasing the group’s prudence in capital management and their ability to sustain growth.
At the same time, the cash balance increased by 41.5% to INR 40,351 crore, which combined with Free Flow from operations (FFO) – EBITDA less finance cost and less tax paid – stood much higher than the debt maturity cover for FY24, FY25, and FY26. This underscores the group’s ability to generate high liquidity and manage their capital prudently, promising secure financial prospects for the future. In conclusion, the completion of the $2.65 billion deleveraging programme is a significant milestone for the Adani Group. The feat reflects the group’s resilient financial strength, strategic operational agility, and most importantly, their unwavering commitment towards instilling investor confidence. This positive momentum is set to accelerate Adani’s future growth trajectory, paving the way for sustained success.