Adani Group Debt Surges by 21% to Rs 2.3 Lakh Crore in FY23: A Deep Dive into its Borrowings , The Adani Group has been making headlines lately due to the surge in its debt levels, which have risen by almost 21% over the past year. According to a Bloomberg report, nearly one-third of this debt is held by global banks, indicating the conglomerate’s dependence on foreign lenders.
The group’s financial troubles began with Hindenburg Research’s report, which raised several questions about its accounting practices and corporate governance. The aftermath of the report saw Adani’s shares plunge, its market capitalization decline, and Gautam Adani’s wealth dwindle by more than 50%.
Let’s take a closer look at Adani’s borrowings, its creditors, and its financial health.
The Growing Proportion of Adani Group’s Borrowings with International Banks
Information obtained from people familiar with the Adani group’s inner workings, as well as presentations to investors, reveals that 29% of the conglomerate’s borrowings were with global international banks at the end of March. It is worth noting that this category did not feature on the group’s list of creditors seven years ago.
This development highlights the group’s increasing dependence on foreign lenders, as it expands at a breakneck speed. The conglomerate has been involved in several big projects, including airports, ports, power plants, and renewable energy, and its borrowings have risen steadily since 2019.
Adani Group’s Gross Debt Rises by 21% to Rs 2,30,000 Crore
As of March 31st, 2023, gross debt at seven main listed Adani firms rose 21% to Rs 2,30,000 crore ($28 billion), according to people familiar with the matter. This steep rise in debt levels has led the group to halt some big projects and even prepay some loans to assuage investors’ concerns.
Adani Group’s List of Creditors
The Adani group’s list of creditors includes both domestic and foreign lenders. Apart from global international banks, the conglomerate also owes money to public sector banks, private sector banks, and non-banking financial companies (NBFCs).
According to reports, the top five lenders to the Adani Group are SBI, Axis Bank, ICICI Bank, HDFC Bank, and Yes Bank. These lenders have exposure to various Adani group entities and have extended loans for different purposes.
The Way Forward for Adani Group
The Adani group’s rising debt levels have raised concerns among investors and analysts. The conglomerate has been taking steps to address these concerns, including prepaying some loans and halting some big projects.
Moving forward, the Adani group will need to balance its growth ambitions with its debt obligations. It will also need to address concerns about its accounting practices and corporate governance to restore investors’ confidence.
Conclusion
The Adani Group’s debt levels have surged by almost 21% over the past year, with a growing proportion held by global international banks. The conglomerate’s borrowings have risen steadily since 2019, as it expands at a breakneck speed. The Adani group’s list of creditors includes both domestic and foreign lenders, and the conglomerate owes money to various banks and NBFCs. The way forward for the Adani group will involve addressing concerns about its debt levels, accounting practices, and corporate governance to restore investors’ confidence.
