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According to the analyst at the Fitch Group unit, “we have observed an improvement in credit metrics for the majority of the Adani Group companies in FY23 compared to FY22, while a few of them have managed to keep their credit metrics stable or seen only a modest deterioration.”
The analyst who called the Indian billionaire’s conglomerate “deeply overleveraged” to start the investigation into Adani Group’s finances over a year ago has changed his mind, claiming that some of the companies now have stronger metrics.
According to an email from CreditSights senior research analyst Lakshmanan R to Bloomberg, Adani Enterprises Ltd., Adani Power Ltd., and Adani Ports & Special Economic Zone Ltd. all have modest leverage. Leverage is still high for Adani Transmission Ltd. and Adani Green Energy Ltd., he claimed.
According to the analyst at the Fitch Group unit, “we have observed an improvement in credit metrics for the majority of the Adani Group companies in FY23 compared to FY22, while a few of them have managed to keep their credit metrics stable or seen only a modest deterioration.”
Due to the varied approaches used, he emphasised that the CreditSights statistics for Adani were still “materially weaker” than those the firm itself indicated.
After the company released a report claiming that its net debt to earnings before interest, tax, depreciation, and amortisation had decreased to 3.27 times at the end of March from 3.81 times the previous year, the new assessment was released mere hours later.
According to Adani’s report dated June 6, about 18% of its gross debt is reserved in the form of cash for liquidity cover, and both domestic and foreign banks continue to demonstrate confidence by disbursing new debt and rolling over current lines.
In Tuesday’s afternoon trading in Mumbai, shares of 10 firms connected to the group traded in a mixed bag. Ambuja Cements Ltd. and ACC Ltd., two cement companies, were among the winners.
According to information gathered by Bloomberg, 11 of the group’s 15 outstanding dollar bonds increased.
After US short seller Hindenburg Research accused the company of fabricating revenues and manipulating stock prices, the firm’s financial situation came under closer scrutiny. Adani has always refuted the accusations made by Hindenburg as well as CreditSights’ evaluation.
For business disclosures like results, Indian corporations often use the period from April to March as their financial year.
Lakshmanan R stated that hazards persisted despite the better debt indicators.
We are particularly cautious because of the Group’s continuing corporate governance challenges, he added. Additionally, the research company sees “some execution risks to the Group’s external fundraising plans that could pose debt refinancing risks for select upcoming debt maturities.”