New Delhi [India], December 3 : The balance sheet and performance of Adani Group's key businesses, including ports, cement, and green energy improves over time says a report by Bernstein.
The report highlighted that the group has taken substantial measures to strengthen its financial position and operational efficiency over the last two years. One of the notable developments is the dramatic reduction in share pledges across the group's companies over the last 1.5 years.
For instance, share pledges in Adani Power have dropped from 25 per cent to 1 per cent, and for Adani Ports, from 17 per cent to nil.
It said "the evolution of share pledges for the group there has been a dramatic drop across companies- this is one area where group has taken significant action over the last 1.5 year"
The report also noted an increase in promoter holdings across the group, except for Adani Energy Solutions, where a Qualified Institutional Placement (QIP) impacted the shareholding. Promoter holding in Ambuja Cements, for example, has risen from 63 per cent to 68 per cent, driven by the issuance of warrants.
The group's overall debt situation has also evolved positively. While total debt decreased from Rs 2,410 billion in March 2023 to Rs 2,385 billion in September 2023, it has since risen to Rs 2,793 billion, primarily due to increased lease liabilities at Adani Enterprises.
However, the group's net debt-to-EBITDA ratio has improved significantly, aided by operational assets like Adani Green and higher profitability in ventures such as solar PV at Adani Enterprises.
It said "Further the group is sitting on a cash of Rs 390 Bn as of Sep'24 as against a cash reserve of Rs 223 Bn in Mar'23".
The report highlights the diversification in Adani Group's funding sources over the years. The group has reduced its reliance on domestic banks and shifted toward bonds and international banks.
In FY16, 86 per cent of funds came from banks, which dropped to 15 per cent in FY24, while the share of bonds rose from 14 to 31 per cent during the same period.
Since March 2023, the share of dollar bonds has decreased, with Non-Banking Financial Companies (NBFCs) gaining prominence due to favourable Indian market rates.
The report said "Adani group has diversified their funding sources over the years- reducing reliance on domestic banks (both PSUs and private) and raising money from bonds and international banks. The share of banks has reduced from 86 per cent in FY16 to just 15 per cent in FY24"
These measures highlight the Adani Group's efforts to strengthen its financial stability and optimize its funding strategy amidst evolving market dynamics.
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