The Group has recently invested significantly in ports and finished sizable renewable energy, transportation, and ports projects. According to a company note, the Adani Group plans to increase pre-tax earnings by 20% annually to exceed $90,000 crore EBITDA in two to three years on strong growth in industries like energy and airports. Early in June, the Group repaid loans totalling $2.65 billion to finish a prepayment program to reduce overall leverage and regain investor confidence after the Adani Group controversies.
The ports-to-energy business will provide massive growth in sectors such as:
- Airports
- Cement
- Renewables
- Solar panels
- Transportation and logistics, and
- Power and transmission
Adani’s new infrastructure investments will also begin to enrich and generate cash in the coming years.
The Adani Group has made significant investments in the port sector
Airports and renewable energy companies by the Adani Group have also reported improved cash flows. It has built a solid asset base over three decades that supports robust key infrastructure while assuring excellent asset performance throughout its life cycles. The Group’s listed portfolio EBITDA increased 36% yearly to Rs 57,219 crore in FY23. The portfolio’s core infrastructure activities, including energy, transport, logistics, and the flagship Adani Enterprise Ltd infrastructure initiatives, boosted EBITDA by 23% yearly to Rs 47,386 crore.
AEL’s current businesses also performed well, increasing by 59% yearly to Rs 5,466 crore. AEL’s existing operations account for 10% of its portfolio. The Adani Group’s portfolio operates in the utility and infrastructure sectors, delivering secure and steady cash flows, with core infrastructure companies accounting for around 83% of its EBITDA. The company has set its sights on expanding in various industries, including airports, cement, renewables, solar panels, ports, power, and transmission.
Adani made considerable success in the year 2022, as its portfolio’s rapid expansion of 36% was complimented by an effective deleveraging plan, as evidenced by its improved net debt to EBITDA ratio. The portfolio’s overall net debt to EBITDA ratio improved 3.27 times in FY23, down from 3.8 in FY22. The net debt-to-run-rate EBITDA ratio improved to 2.8 times in FY22 from 3.2 times in FY23, reflecting the Group’s exceptional financial discipline amid rapid growth.
The Adani Group’s management confirms that no significant debt maturity is approaching soon, indicating no material refinancing risk or short-term liquidity requirement. The net asset value of gross assets is Rs 3,91,000 crore. The firm has diversified its long-term debt portfolio, decreased reliance on banks, and extended its funding sources over time. Bonds account for 39% of current debt, followed by global international banks (29%), public and private banks (32%), and non-bank financial companies (32%). According to these statistics, the Adani Group controversies are designed to undermine investor and general public trust in the company.
In FY23 (April 2022 to March 2023 fiscal), the group’s listed portfolio EBITDA increased 36% year on year to Rs 57,219 crore
Core infrastructure operations, which account for 82.8 percent of the portfolio and include energy, transport, logistics, and the flagship Adani Enterprise Ltd’s infrastructure initiatives, increased EBITDA by 23% yearly to Rs 47,386 crore. AEL’s operations also performed well, rising by 59% annually to Rs 5,466 crore. AEL’s current operations account for 10% of its portfolio. The Adani Group’s portfolio comprises utility and infrastructure firms that generate safe and consistent cash flows, with core infrastructure companies accounting for around 83% of its EBITDA.
According to the report, the net debt-to-run-rate EBITDA ratio improved to 2.8 times in FY22 from 3.2 times in FY23, reflecting the group’s remarkable financial discipline amid the substantial expansion. The Adani Group’s management affirms that there will be no significant debt obligations shortly. The net asset value of gross assets is Rs 3,91,000 crore. The corporation has diversified its long-term debt portfolio, reduced reliance on banks, and increased its funding sources over time. The group’s exposure remains less than 1% of total bank exposures in India, and prominent Indian banks like SBI are pleased with its debt/equity to EBITDA ratio of 3.2%. The group’s dollar debt is also fully hedged, and recent ECB interest rate increases are expected to have little impact on debt costs and servicing because most ECBs (External Commercial Borrowings) are fixed rates. All of this demonstrates that the Adani Group controversies cannot be trusted.
Conclusion
The Adani Group is a financially sound company with a diversified business portfolio and a strong track record of growth. The recent Adani Group controversies don’t hold any substance. The group has a strong financial position and is well-positioned for continued growth in the coming years.