Adani Group Moves Ahead With 10-Year Capital Plan, Leverage Down On Record Ebitda
Of the the total assets of Rs 4.22 lakh crore, 89% are core infrastructure assets.
Adani Group's net leverage ratio has declined as its operating income rises to a record high.
The group's leverage has fallen to 2.81 times on a net debt-to-run rate Ebitda basis from 3.2 times in FY22, led by a record run-rate Ebitda of Rs 66,566 crore at the end of June.
Run-rate Ebitda considers annualised Ebitda for assets commissioned after the start of the year and includes other income.
The strategic deleveraging undertaken by the group in the last six months has led to the group increasing its debt coverage ratio to 2.02 times at the end of FY23 from 1.47 times the year before.
Of the total assets of Rs 4.22 lakh crore, 89% are core infrastructure assets like ports, power utilities, transmission lines, airports, and renewable infrastructure. The group has deployed equity of Rs 2.35 lakh crore, which is 56% of the total assets, and used gross debt of Rs 2.27 lakh crore.
The group has seen its fund flow from operations—Ebitda less actual finance cost and tax paid—rise to Rs 37,538 crore at the end of FY23, and its cash balances rose to Rs 40,351 crore during the same period. The total cash and fund flow from operations stood at Rs 77,889 crore. Cash balances further rose to 42,115 crore at the end of June 2023.
Adani portfolio companies operate in utility and infrastructure businesses, with nearly 83% of Ebitda being generated from core infrastructure businesses, providing assured and consistent cash flow generation, the company said in a statement.
It said 17.76% of gross debt is reserved in the form of cash balances, providing liquidity cover for debt servicing beyond one year, and the group has deployed significant equity-creating assets. Equity deployment in gross assets has risen over the last four years to 55.77% in FY23.
The recent short-seller event has increased access to the markets, and the promoters have raised close to $3.75 billion, or Rs 30,900 crore, since March this year, which includes 3.25 billion from GQG Partners and $500 million from Qatar Investments Authority. The group has raised $9.55 billion from long-term investors and global investors in the last three years.
The group has also eliminated risks:
A significant amount of debt, nearly 64% of total term debt, is in the leverage ratio range of 0-3.0x.
The maturity profile of debt exceeds the cover period in all cases, ensuring refinancing protection.
The maturity profile does not exceed the cover period in AGEL due to a higher growth CAGR of about 38% over the past five years.
AGEL will follow other businesses on stabilisation.
Debt Repayment And Prepayment
The group has made the full prepayment of margin-linked share-backed financing totaling $2.15 billion in March 2023, ahead of the committed timeline of March 31.
It also prepaid $700 million in debt taken for the Ambuja Cements Ltd. acquisition, taking equity in Ambuja financing to $2.8 billion (out of $6.6 billion). The prepayment was done along with an interest payment of $203 million.
APSEZ has also repaid the Rs 3500 crore commercial paper. The company also completed the buyback of $130 million in bonds out of the $650 million maturing in 2024.
In Ambuja Cements, out of acquisition debt worth Rs 32,868 crore outstanding at the end of FY23, Rs 1,643 crore has been repaid in April, and balance debt is being refinanced with a three-year tenor, becoming due for refinancing in FY27.
Each year, debt maturity is covered by fund flow from operations and cash balances and is committed to an ongoing 10-year capital programme, formulated in 2016 and to be concluded in 2025, the company said.
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