Adani Group`s ability to service debt is at comfortable levels
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No Adani Group company has ever defaulted in any debt repayment and Adani Group's ability to service it's debt is at comfortable levels, the group said in a communication to stakeholders as part of its Capital Management Philosophy.
Adani's EBITDA's growth rate is at 2x the growth of debt. No Adani Group company has ever defaulted in any debt repayment, the group has said.
The long term external debt at Adani is Rs 1.64 lakh crore (and not Rs 2.2 lakh crore). The balance includes: Rs 0.21 lakh crore includes short term debt balanced against receivables (which is less than 75 per cent of receivables) thus appropriately equity backed and 0.35 lakh crore is shareholder loans, from promoters, to various verticals to support growth.
Cash and Cash equivalents is Rs 27,579 crore. Therefore, the net external long-term debt is Rs 1.37 lakh crore.
Adjusting for debt used for the projects under construction (UC debt fully supported by long term revenue contracts like PPA's), the net long term debt is Rs 1.14 lakh crore.
Against the debt of Rs 1.37 lakh crore, gross block of assets is Rs 3.15 lakh crore (2.3x). The average tenor of debt has gone up from 5.57 years to 7.15 years, over the last 6 years.
The average interest rates, adjusting for the tenor, have fallen from 8.53 per cent to 8.13 per cent over the last 6 years.
Investment grade foreign bonds (by rating agencies) now make up 50 per cent of long-term debt. Net debt/EBITDA has dropped from 7.6 to 3.9 (3.3 excluding UC debt) over the last 9 years (lowest in the infrastructure sector). The Implicit rating of Adani Portfolio is AA- domestically.
Each of the portfolio businesses are leaders in their respective sectors in terms of their ability and track record to service long term debt, Adani Group said.
