NEW DELHI: The US-headquartered financial research major Bernstein has published a report on Adani Group companies, stating that the Group is currently in a much stronger position than it was during the Hindenburg attack in January 2023.
Despite facing some US-related developments, the Adani Group is on solid footing across four key areas: no share pledge, leverage, debt repayment and valuations, the report mentioned.
One of the major concerns during the Hindenburg crisis was the share pledge, but the group has taken significant steps to reduce it over the past 1.5 years.
“This is one area where the group has taken substantial action,” the report said, adding that “if we look at the evolution of share pledges for the group there has been a dramatic drop across companies”.
For example, the share pledge in Adani Power has dropped from 25 per cent to 1 per cent and in Adani Ports, it has fallen from 17 per cent to zero.
Promoter holding has also increased across the Group, except in Adani Energy Solutions, which is due to a recent Qualified Institutional Placement (QIP).
Additionally, the Group’s overall debt has decreased following the short-seller event, falling from Rs 2.41 lakh crore in March 2023 to Rs 2.39 lakh crore in September 2023, the report noted.
Although the debt has risen slightly since then, profits have grown even more, reducing the group’s leverage from 3.8 times before the Hindenburg incident to less than 2.5 times now, said Bernstein.
In terms of debt repayment, Adani Green had a significant portion of its debt maturing in 2024, including a tricky-to-refinance $750 million Holdco bond.
However, the company’s repayment schedule is now more balanced. In 2023, only Rs 8,900 crore in credit facilities are maturing in Adani Green. By the end of September, the company already had Rs 5,900 crore in cash, a figure likely to grow significantly thanks to strong cash flows, making refinancing more manageable.
Regarding valuations and stock performance, Bernstein is overweight on Adani Ports, as the stock is trading below its smaller peers, including JSW Infra and Concor.