The goal of the Adani Group’s strategy is to amass sufficient funds, including reserves and cash from ongoing activities in the infrastructure sector, to pay off any future loans.
By 2025, it is intended to reach this financial condition. This strategy is primarily used to guarantee that no debt needs to be refinanced and to eliminate any risk related to the market, the economy, or a knock-on effect of major international events.
For 2022–2023, the free cash flow and cash in the bank are now at about Rs 77,889 crore. With an asset base of about Rs. 4.22 lakh crore, the present gross debt is about Rs. 2.27 lakh crore. The net debt to EBITDA ratio has decreased from 3.8x in 2021–2022 to 3.3x in 2022–2023 in terms of leverage.
The firm, which had revenue of Rs. 2.62 lakh crore, is readjusting its growth plan by pacing down acquisitions and paying down debt. Additionally, there are plans to sell non-core assets. In actuality, this month saw the sale of the financial services division.
The Adani family has raised $1.87 billion from the global private equity company GQG Partners by selling shares in four of its businesses Adani Enterprises (AEL), Adani Ports & SEZ (APSEZ), Adani Transmission (ATL), and Adani Green Energy (AGEL).
Three of the group’s firms also have board clearance to raise $4 billion over the course of the following 12 months. The business has diluted $5.79 billion in stock over the previous four years to include major international participants including TotalEnergies, Qatar Investment Authority, and Abu Dhabi-based IHC business.
The promoters of the Adani group of firms intend to raise $50 billion in equity over the next 20 years. This is in addition to the internal funds of the many corporations, which total about $100 billion.
Green hydrogen, airports, highways, data centres, water, petrochemicals, and other new fields are among them.
This approach to investing fits the needs of a growing economy. India’s GDP is expected to develop tremendously and reach a size of $25–30 trillion by 2050, according to billionaire Gautam Adani. Despite global issues with the climate, geopolitics, supply chains, energy, and inflation, he continued, this growth is projected in India.
Ten businesses make up the Adani portfolio at the moment. This number is anticipated to rise to 14–15 firms by 2033. The portfolio will still contain a certain amount of shares held by the promoter family, according to the business. According to the business, “Capital recycling within this portfolio should not be viewed as dilution.
All of the Adani stocks, with the exception of ATL and ATGL, are already on the road to recovery. The mutual fund sector is still unconvinced, notwithstanding the correction. “Well, various MFs can have various justifications for not holding Adani Group equities. However, “herd mentality” is one factor I can think of, according to a fund manager.
