Adani Group's Debt Surge as Domestic Banks and NBFCs Escalate Exposure to 36% of Total Debt

Adani Group's Rising Debt and Lenders' Exposure

Domestic banks and non-banking financial companies (NBFCs) have increased their exposure to the Adani Group to 36% of the total debt, raising their stake by 500 basis points throughout 2023-24, according to new data. The group's overall debt has escalated due to significant capital expenditure across various sectors, which include green energy and infrastructure.

Details on Lending and Financial Metrics

• As of March 31, 2024, lenders have disbursed a total of ₹88,100 crore to the Adani Group.
• In March 2023, domestic banks and NBFCs had an outstanding loan balance of ₹70,213 crore—about 31% of the group’s gross debt.
• The consortium of banks, featuring State Bank, ICICI Bank, and others, has markedly increased their funding.

Financial Growth Amid Debt Increase

The Adani Group's debt levels crested by approximately 6% YoY as of the end of March. However, the aggregate operating profit surged by 45% YoY to ₹82,917 crore, significantly backed by advancements in its infrastructure segment. The conglomerate anticipates achieving an operating profit of ₹1,00,000 crore in the current fiscal year, fueled by solid cash flows from its pivotal sectors: cement, ports, and green energy.

Future Prospects and Investments

• Enhancements in capacity are forecasted at Adani Cement, with a 13% increase as Penna Cement integrates.
• Expect operational launches at Vizhinjam and Colombo ports this year, alongside an uptick at existing ports.
• Adani Green Energy targets an escalation to 17 GW from approximately 11 GW currently.

The overall outlook signals growth despite the rise in debt, leading to a net debt-to-operating profit ratio decrease at 2.19 times, down from 3.27 times the previous year.