Adani Group said that it has improved its debt metrics as it has repaid loans aggregating $2.65 billion to complete a prepayment programme to cut overall leverage in order to win back investor trust post the Hindenburg report. “The Group has made a full prepayment of margin linked share backed financing totalling $2.15 billion before 12 March, well in advance of the 31st March 2023 timeline. The promoters also prepaid $700 million debt taken for the Ambuja Cement acquisition. The prepayment was done along with interest payment of $203 million,” the company said in a statement. The conglomerate also stated that the promoters completed a secondary transaction with GQG Partners of $1.87 billion (Rs 155 billion) for four key listed entities.
“The deleveraging program testifies the strong liquidity management and capital access at sponsor level even in volatile market condition, supplementing the solid capital prudency adopted at all portfolio companies,” said the Adani Group. Adani Group has lost $145 billion in market value after US short-seller Hindenburg Research released a report in January alleging accounting fraud and stock price manipulation at the Group. The Adani Group had denied all allegations and is now working on a comeback strategy.
The credit update released by the company also highlighted improvements in key financial metrics, that is, the portfolio’s combined Net Debt to EBITDA ratio showed progress decreasing from 3.81 in FY22 to 3.27 in FY23. The run rate EBITDA surged from Rs 50,706 crore in FY22 to Rs 66,566 crore in FY23. As a result, Net Debt was as low as 2.8x. The Debt Service Cover Ratio (DSCR) improved to 2.02x during FY23 from 1.47x during FY22. “Core Infra constitutes ~ 83 per cent of the portfolio EBITDA providing resiliency, stability and high predictability to the cash flow given majority of projects are largely contracted,” it said.
Meanwhile, domestic and international banks are continuously showing confidence in the conglomerate by dsbursing new debt and rolling over existing lines. “This has ensured business continuity without any disruption in capital structure. Further, affirmation of credit ratings has also facilitated access to credit facilities,” it said. The update said that the gross assets increased to Rs 4.23 lakh crore, up by Rs 1.06 lakh crore and the gross asset/ net debt cover improved to 2.26x in FY23 from 1.98x FY22. “Continued investments in Core Infra with Gross Assets of Rs 3.77 lakh crore (~89 per cent of the portfolio) which provides long term multi decadal visibility of cash flow,” it added. GQG Partners has invested around $2.5 billion in five Adani Group stocks since the Hindenburg report.
In terms of few of the positive regulatory updates, Adani Group said that AERA released tariff orders for Mangaluru airport and Ahmedabad airport and consultation paper for Lucknow airport for FY22-26 control period. Further, NCLT approved the merger of APL with its operating subsidiaries and the APL also received NOC from all 27 lenders for the merger. NCLT had also approved the takeover of Karaikal port by APSEZ in April. AGEL had received payments of Rs 748 crore (on 17th Feb) and Rs 132 crore (on 4th Mar) pursuant to favourable APTEL orders pertaining to Tamil Nadu solar project. The report also mentioned favourable MERC order for MEGPTCL and AEML allowing recovery of Rs 1,526 crore (project cost true up) and Rs 1,574 crore (past period revenue gap) respectively.