The Adani Group, a powerhouse in various sectors such as energy, infrastructure, and logistics, has accumulated substantial debt over the years. As of March 31, 2024, the total debt on Adani Group's balance sheet stood at approximately ₹2.41 lakh crore. This figure is a mix of both domestic and international borrowings, reflecting the group's aggressive expansion strategy.
Category Amount (in Crores) Total Debt 241,000 Long-Term Loans 200,000 Working Capital Loans 19,000 Indian Bank Loans 75,800 Foreign Borrowings 69,000 Indian Capital Market 12,000 Foreign Capital Market 69,000 SBI Loan 22,000 Axis Bank Loan 9,200 PNB Loan 6,000 LIC Loan 5,790 Operating Profit (2013) 4,500 Operating Profit (2023-24) 83,000 Net Profit (2009) 500 Net Profit (2024) 30,000 Adani Enterprises Share Price (1999) 27 Adani Enterprises Share Price (2024) 2,070
The debt of ₹2.41 lakh crore can be divided into two main categories: Long-Term Loans and Working Capital Loans.
Long-Term Loans: These loans have a repayment period exceeding one year and are typically used for expanding business operations or starting new projects. Adani Group's long-term loans amount to approximately ₹2 lakh crore, constituting about 92% of its total debt.
Working Capital Loans: These are short-term loans with a repayment period of less than a year, primarily used for day-to-day operations like paying salaries or covering rent. The working capital loans of the Adani Group account for around ₹19,000 crore, about 8% of the total debt.
Adani Group has sourced its loans from a variety of places, including Indian banks, foreign institutions, and capital markets:
Indian Banks: The largest chunk of the debt, about ₹75,800 crore, has been sourced from Indian banks. Notable contributors include the State Bank of India with ₹22,000 crore, Axis Bank with ₹9,200 crore, and Punjab National Bank with approximately ₹6,000 crore. Additionally, the Life Insurance Corporation of India (LIC) has extended loans worth ₹5,790 crore.
Foreign Borrowings: The group has borrowed around ₹69,000 crore from international sources, reflecting its global investment strategy and partnerships.
Capital Markets: Adani Group has also raised significant amounts through the issuance of bonds in both Indian and foreign capital markets, amounting to approximately ₹12,000 crore domestically and ₹69,000 crore internationally.
Given the substantial amount of debt, a critical question arises: Is the Adani Group in a position to repay its loans?
The financial indicators of the Adani Group present a robust picture:
Operating Profit: The operating profit of the group has shown substantial growth, from around ₹4,500 crore in 2013 to nearly ₹83,000 crore in the financial year 2023-24, marking an increase of 18.5 times over a decade.
Net Profit: Net profit, which accounts for taxes and loan repayments, has also seen a remarkable rise from ₹500 crore in 2009 to over ₹30,000 crore in 2024, a 60-fold increase in just 15 years.
Adani Group companies have also performed well in the stock market:
Adani Enterprises: Listed in January 1999, its share price has skyrocketed from ₹27 to ₹2,070 by August 2024, demonstrating an increase of nearly 7,620%.
Adani Ports and Adani Green Energy: These companies have also seen impressive growth in their stock prices, reflecting investor confidence and strong financial performance.
A critical measure of the company's ability to service its debt is the Debt-to-EBITDA ratio, which has been decreasing over the past five years for Adani Group companies. This indicates that the group is improving its debt management relative to its earnings before interest, taxes, depreciation, and amortization.
Despite the high debt levels, the Adani Group's financial performance suggests it is in a relatively strong position to manage its obligations. The group claims to have enough cash flow to cover its debt repayments for the next 30 months, as stated by Gautam Adani on August 19, 2024.
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