Adani Group’s debt mix now sees domestic banks and non-banking financial companies (NBFCs) accounting for 36% of its total debt, as per recent data.
This shows a shift in the group’s financial structure, with Indian lenders increasing their exposure by around 500 basis points during the 2023-24 financial year. The rise in debt is mainly attributed to capital expenditure in sectors like airports and green energy.
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As of March 31, 2024, Indian banks and NBFCs had lent Rs 88,100 crore to the Adani Group, contributing to the total debt of Rs 2,41,394 crore. This is a noticeable increase from March 31, 2023, when domestic lenders had an outstanding loan amount of Rs 70,213 crore, which was 31% of the group’s total debt of Rs 2,27,248 crore.
The increase in domestic lending includes contributions from major banks such as the State Bank of India, Bank of Baroda, Union Bank of India, Canara Bank, HDFC Bank, Axis Bank, and ICICI Bank. Despite the increased lending, queries sent to these banks remained unanswered at the time of reporting.
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Adani Group’s debt has grown due to significant capital expenditures in its businesses, particularly in the airports and green energy sectors. The group operates across various industries, including infrastructure, ports, metals, building materials, utilities, and fast-moving consumer goods.
During the last fiscal year, the group’s debt from the domestic capital market also rose, reaching Rs 12,404 crore by March 2024, up from Rs 11,562 crore the previous year.
On the other hand, debt from global banks saw a slight decline, amounting to Rs 63,296 crore as of March 2024, down from Rs 63,781 crore a year earlier. Additionally, debt from global capital markets decreased to Rs 69,019 crore from Rs 72,794 crore during the same period.
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Overall, Adani Group’s debt increased by around 6% on a year-on-year basis as of March 2024. However, the group’s operating profit grew substantially, rising by 45% to Rs 82,917 crore in the 2023-24 financial year, largely driven by its infrastructure businesses, including airports, green hydrogen, and data centres.
Looking ahead, the Adani Group is targeting an operating profit of Rs 1,00,000 crore for the current fiscal year. This growth is expected to be supported by incremental cash flows from its cement, ports, green energy, airports, and solar modules businesses.
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The capacity at Adani Cement is set to increase by nearly 13%, with the recent acquisition of Penna Cement. Additionally, the Vizhinjam and Colombo ports are expected to become operational this year, along with expansions at Gangavaram and Krishnapatnam ports.
Adani Green Energy’s capacity is also expected to rise to nearly 17 GW during the year, up from around 11 GW currently. The group’s Navi Mumbai airport is set to become operational, and strong demand from the solar modules business is anticipated to further boost cash flows.
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Despite the 6% rise in debt during FY24, the significant increase in operating profit has helped the Adani Group reduce its net debt-to-operating profit ratio to its lowest level in at least six years, standing at 2.19 times as of March 2024, down from 3.27 times a year earlier.
