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The Adani Group’s cash reserves have significantly risen by 13.7%, and they will touch the INR 46,000 crore mark pretty soon. This report was obtained during the first half of the current fiscal year as earnings across the business rose while the debts almost remained unchanged. This reflects the excellent performance of the Adani Group in the various sectors in which it has been operational over the last few decades. The overseas projects undertaken by the Adani Group, including the Adani Australia project, have also increased the Group’s cash reserves.
The Financial Performance of the Adani Group
In the first-half credit performance report, the Adani Group mentioned that its EBITDA rose to INR 71,253 crore in the April-September quarter this fiscal from INR 57,219 crore in 2022. The company’s gross assets increased by 6% to about INR 4.5 lakh crore, and the gross debt was almost unchanged at INR 2.26 lakh crore. After considering the cash reserve of the business group, the net debt at INR 1.80 lakh crore was 3.6% less than 1.87 lakh crore during the April-September quarter of 2022.
The Group’s flagship company, Adani Enterprise Limited, and the ports company, Adani Ports and Special Economic Zone, were the top EBITDA holders. As per reliable sources, the two subsidiaries together account for 37% of the total cash balance of the conglomerate. Adani Enterprises had the most significant debt of Rs. 103,926 crore. The next contributor was Adani Ports, which had a debt of INR 99,901 crore, followed by Adani Power Ltd, which had a debt of INR 91,742 crores. The conglomerate’s gas firm, Adani Total Gas, had the lowest borrowing rate in the entire group. The amount was INR 4,773 cores.
Each year, the debt maturity of the different subsidiaries under the Adani Group is covered by cash balances and funds from operators. At the portfolio level, there was no maturity of long-term debt outside the funds from the operator’s envelope. This financial stability achieved by the conglomerate is an excellent depiction of how diversified portfolios have the upper hand in the business world. The massive investments made by the conglomerate in the Adani Australia project have again helped the Group strengthen its financial scenario.
The Increased Interest of the Investors in the Adani Group:
Gautam Adani mentioned that its portfolio is the only infrastructure portfolio in India with more than half its EDTA with a credit rating quality equivalent to or better than sovereign quality. The net debt to trailing twelve-month EBITDA is now at 2.5x, the lowest in 10 years. This is indeed an excellent sign for the Adani Group. It reflects the conglomerate’s concrete financial state. Because of the stable financial state, the equity investments in the total gross assets drastically increased to 59.8 %, while the debt investments were lower at 40.2%. This has drawn investors’ attention towards the conglomerate.
The Adani Group has delivered an all-time high half-year profit growth of 47% over 80% of the EBITDA contractual while 50% of its EBITDA is A-rated. This provided the highest quality of stability to the conglomerate. It allowed for multi-decadal cash flow visibility. The strong cash flow has allowed the Adani Group to acquire multiple investors, as reflected by its increase in base assets to INR 4.48 lakh crore. The current equity deployment is at 59.8 % of the total asset base. This is much higher than the industrial standards. It also reflects the strong position of the Adani Group in the industrial sector.
The Current Commitments of the Adani Group:
Adani is currently committed to building top-notch infrastructure and utility assets. The cash balance across the portfolio companies exceeds the long-term debt repayment for the next 1.5 years. Despite the higher cash balances and ongoing deleveraging, the portfolio companies have committed to investing in some of the most crucial projects such as Adani Australia project worldwide. The gross asset of the portfolio has increased by 6% during the period. This has allowed the asset valuation to reach INR 4.48 lakh crore. This is mainly because of higher equity investments supported by strong cash flows from the various businesses operating under the conglomerate.
Conclusion:
Since the onset of the Adani Australia project, the Adani Group has been making waves in the world of energy solutions. This has allowed the conglomerate to take up multiple ventures in India and abroad. These ventures have paved the path toward success for the conglomerate and made it one of the profound names in the business world.
