Adani Group has adequate liquidity to meet debt and capex plans: CRISIL Ratings

New Delhi [India], November 29 (ANI): The Adani Group has sufficient liquidity and operational cash flows to meet its debt obligations and planned capital expenditures in the medium term, according to an update on the financial situation of the Adani Group by the CRISIL Ratings.

CRISIL Ratings stated, “All our outstanding ratings are under continuous surveillance.”

The update comes as the group faces legal proceedings in the United States. On November 20, 2024, the US Department of Justice and the Securities and Exchange Commission (SEC) filed charges against key officials of Adani Green Energy Ltd (AGEL), including Gautam Adani, Sagar Adani, and Vneet Jaain. The charges involve allegations of securities fraud, wire fraud, and misleading bond offering documents.

The Adani Group had refuted the bribery allegations saying, “Gautam Adani, Sagar Adani and Vneet Jaain have not been charged with any violation of the FCPA in the counts set forth in the indictment of the US DOJ or civil complaint of the US SEC.”

Despite these challenges, CRISIL Ratings noted that, based on feedback from Adani Group’s management and lenders, there have been no negative actions from investors or lenders so far, such as accelerated debt repayments or changes in loan terms.

The group also has the flexibility to adjust its discretionary capital expenditures based on financial market developments.

The Adani Group reported a robust financial performance for fiscal year 2024, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Rs82,917 crore.

The group’s net debt-to-EBITDA ratio stood at 2.19 times, reflecting healthy debt management. As of September 2024, the group maintained a cash balance of over Rs53,000 crore, which is more than adequate to cover its long-term debt maturities of approximately Rs27,500 crore.

CRISIL emphasised that the group’s ratings are supported by its strong business and financial risk profiles. These factors include steady cash flows, long-term infrastructure assets, and its critical role within India’s infrastructure sector. The group’s association with the larger Adani Group also provides additional financial flexibility.

While CRISIL acknowledged the Adani Group’s financial stability, it also highlighted potential risks. Any adverse regulatory or judicial actions, or restrictions on accessing domestic and international capital, could affect the group’s financial flexibility.

A significant rise in financing costs or difficulties in refinancing upcoming debt repayments will also be closely monitored.

Recent developments, including a decline in the market value of Adani Group’s listed companies and the cancellation of a USD 600 million bond offering by AGEL, have raised concerns.

CRISIL is keeping a close watch on how these issues may impact the group’s operations and financial position in the coming months.