Even after the US case, Adani Group’s financial position strong

New Delhi| American financial research firm Bernstein has said in its report that at present the financial condition of Adani group companies is much stronger than the Hindenburg attack in 2023. The report said that even after the US case, Adani Group’s roots remain strong in four key points such as share-mortgage, leverage, loan repayment and valuation.

One of the major concerns during the Hindenburg crisis was share-mortgaging, but the group has taken significant steps to reduce it over the past 1.5 years. The report said this is an area where the group has taken adequate action. If we look at the pledged shares of the group, all the companies have declined significantly.

For example, Adani Power had previously pledged 25 per cent of its shares, which have now been reduced to one per cent. At the same time, earlier 17 percent shares of Adani Port were pledged, which has now become zero. The stake of promoters of all Adani Group companies (except Adani Energy Solutions) has increased.

The reason for non-increase in promoters’ stake in Adani Energy Solutions was the recently launched Qualified Institutional Placement (QIP) by the company. The report said the group’s total debt has been reduced after the short-seller incident, from Rs 2.41 lakh crore in March 2023 to Rs 2.39 lakh crore in September 2023.

Although debt has risen slightly since then, profits have increased more, Bernstein said, reducing the group’s leverage from 3.8 times before the Hindenburg incident to less than 2.5 times now. The report further said that the company’s loan repayment schedule is now more balanced. Only Rs 8,900 crore of credit facilities are maturing in Adani Green. By the end of September, the company already had Rs 5,900 crore in cash, a figure likely to rise significantly due to strong cash flow, making refinancing more manageable.

Regarding valuations and share performance, Bernstein said it has more over weightage on Adani Ports as the stock is trading lower than other companies in the sector like JSW Infra and Concor.