The Adani Group may need to reduce its investment pace due to limited access to global capital markets, according to bankers. They also suggest domestic banks might hesitate to provide new loans for projects where directors are currently under investigation.
The Adani group’s total debt is Rs 2.4 lakh crore, with a cash balance of Rs 59,791 crore. This results in a net debt of Rs 1,81,604 crore. Their cash balance represents 24.77% of their gross debt, enough to cover 30 months of debt payments. Therefore, lenders do not anticipate immediate risks to loan repayments.
Domestic banks and institutions hold Rs 88,100 crore, representing 36% of the Adani group’s total debt. The majority of these domestic loans, Rs 75,877 crore, are term loans, while working capital loans amount to Rs 12,233 crore.
Public sector banks account for 15% of the total debt, private banks 4%, and the largest domestic portion, 18%, is held by public sector financial institutions and non-bank finance companies lending to the power and infrastructure sectors.
Global banks hold 26% of the total debt, while international capital markets, through bonds, represent the largest creditors at 29%. Domestic capital markets hold a 5% share.
Shares of Power Finance Corporation and Life Insurance Corporation, which have significant exposure to the Adani group, experienced declines of 3.5% and 1.6% respectively.
Major institutions with substantial debt exposure to the Adani group include LIC, SBI, Power Finance Corporation, and Rural Electrification Corporation.
In a post-first quarter investor presentation, the group stated, “while its gross debt rose consistently from Rs 2.27 lakh crore in FY23 to Rs 2.41 lakh crore in FY24, the net debt has shrunk from Rs 1.87 lakh crore to Rs 1.81 lakh crore in FY24 due to improvements in cash balances.” This followed increased earnings and equity mobilization by the group.
(with ToI inputs)
