Bernstein Reports Adani Group's Strength Amid US Developments
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New Delhi, Dec 3 (NationPress) A report from Bernstein, a prominent financial research company based in the US, indicates that the Adani Group has emerged in a much more robust state than it was during the Hindenburg crisis in January 2023.
Despite facing several challenges related to the US, Adani Group maintains a strong foundation across four critical dimensions: no share pledge, leverage, debt repayment, and valuations, as noted in the report.
One key issue during the Hindenburg crisis was the share pledge, but the Group has made significant progress in reducing it over the last 1.5 years.
According to the report, “This is one area where the group has taken substantial action,” emphasizing that “if we look at the evolution of share pledges for the group, there has been a dramatic drop across companies.”
For instance, the share pledge in Adani Power has decreased from 25 percent to 1 percent, while in Adani Ports, it has fallen from 17 percent to zero.
Furthermore, promoter holding has increased throughout the Group, with the exception of Adani Energy Solutions, which is a result of a recent Qualified Institutional Placement (QIP).
The Group's total debt has also diminished following the short-seller incident, decreasing from Rs 2.41 lakh crore in March 2023 to Rs 2.39 lakh crore in September 2023, as per the report.
Although there has been a slight uptick in debt since then, profits have surged even more, leading to a reduction in the group’s leverage ratio from 3.8 times prior to the Hindenburg event to less than 2.5 times now, stated Bernstein.
When it comes to debt repayment, Adani Green has a considerable amount of debt maturing in 2024, including a challenging $750 million Holdco bond that needs refinancing.
Nevertheless, the company’s repayment timeline is now more structured, with only Rs 8,900 crore in credit facilities maturing in Adani Green in 2023. By the end of September, the company had already accumulated Rs 5,900 crore in cash, a figure projected to increase significantly due to robust cash flows, making refinancing more feasible.
As for valuations and stock performance, Bernstein holds an overweight position on Adani Ports, as the stock is currently trading below that of its smaller competitors, such as JSW Infra and Concor.
