The Adani Group, led by Gautam Adani, reported a significant increase in its gross debt, which reached Rs 2.41 lakh crore as of March 31, 2024, up from Rs 2.27 lakh crore in FY23.
However, the group’s net debt saw a slight decline, standing at Rs 1.82 lakh crore in FY24, down from Rs 1.87 lakh crore the previous year. The conglomerate’s net debt to EBITDA ratio, an important measure of its ability to service its debt, also improved, dropping to 2.19x in FY24.
How Much Is The Domestic Lending to Adani Group ?
As of FY24, domestic lenders, including banks and other financial institutions, had collectively lent over Rs 88,100 crore to the Adani Group in long-term and working capital loans.
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This figure includes Rs 75,877 crore in long-term debt and Rs 12,223 crore in working capital debt. These domestic loans represent a significant portion of the group’s total gross debt, which includes both long-term and working capital borrowings.
Breakdown of Adani Group’s Debt Structure
The group’s gross debt of Rs 2.41 lakh crore was primarily composed of long-term debt, which accounted for 92% of the total, or Rs 2.22 lakh crore. The remaining 8%, or Rs 19,819 crore, was attributed to working capital debt.
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A significant 36% of the group’s borrowings were sourced from domestic Indian banks and financial institutions, while 5% was raised from domestic capital markets.
International funding also played a crucial role, with 29% of the total borrowings coming from global capital markets and 26% from foreign banks. The remaining 4% of the group’s debt was sourced from other avenues.
Detailed Distribution of Long-Term and Working Capital Debt
In terms of long-term debt, Adani Group raised Rs 69,019 crore from global capital markets, Rs 61,900 crore from global banks, and Rs 2,376 crore from other sources, in addition to the Rs 75,877 crore borrowed from domestic banks and financial institutions and Rs 12,404 crore from domestic capital markets.
Regarding working capital debt, the group borrowed Rs 12,223 crore from domestic banks and financial institutions, Rs 1,396 crore from global banks, and Rs 6,199 crore from other sources.
Key Indian Banks’ Exposure to Adani Group
The Adani Group’s annual report for FY24 highlights the significant exposure of several Indian banks to its operations. Key lenders include State Bank of India, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, IDFC First Bank, Bank of India, RBL Bank, Central Bank of India, Union Bank of India, REC Limited, and IDBI Bank.
Following the release of the Hindenburg report in January 2023, which raised allegations against the group, several Indian banks and financial institutions disclosed their exposure.
Life Insurance Corporation of India (LIC) revealed an exposure of Rs 35,920 crore to the Adani Group, which included Rs 30,130 crore in equity and Rs 5,790 crore in debt.
State Bank of India disclosed a total exposure of around Rs 27,000 crore, while Axis Bank reported Rs 9,220 crore, including non-funded exposure.
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Other significant disclosures included Punjab National Bank and REC Limited, each with approximately Rs 7,000 crore of exposure, Bank of Baroda with Rs 5,380 crore, and IndusInd Bank with Rs 4,150 crore. These figures are subject to fluctuations since their initial disclosure.
Domestic Vs Foreign Sources of Debt
The Adani Group’s debt is predominantly sourced internationally, with 59% of its total debt coming from foreign sources, while the remaining 41% is sourced domestically. A closer examination of the group’s key companies reveals varying reliance on domestic versus foreign debt.
Adani Enterprises relied heavily on domestic sources for 61% of its borrowings, while Adani Ports sourced only 20% of its debt domestically. Adani Energy Solutions secured 25% of its debt from domestic lenders.
Notably, Adani Power and Adani Total Gas sourced all their debt domestically, while Ambuja Cements exclusively raised its debt from international sources.
This comprehensive debt structure underscores the Adani Group’s reliance on both domestic and international funding to support its expansive operations across various sectors.
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