© Reuters. FILE PHOTO: FILE PHOTO: The Adani Group logo is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. REUTERS/Amit Dave/File Photo/File Photo
(This Sept. 7 story corrects Fitch Group, not Fitch, in the first paragraph)
Author: Krishna N. Das
NEW DELHI (Reuters) – CreditSights, part of Fitch Group, said it had discovered calculation errors in its recent report on the debt of two power and transmission companies controlled by India’s richest man, Gautam Adani, after discussions with management.
A report by debt research firm CreditSights late last month calling the conglomerate “deeply over leveraged” and flagging other risks sent shares of many Adani companies tumbling.
In a report dated September 7, CreditSights said it had spoken with financial and other Adani Group executives and reconciled some figures for Adani Transmission and Adani Power.
“(Adani’s) management believes the group’s leverage is at manageable levels and its expansion plans are not largely debt-financed,” CreditSights said.
But CreditSights said on Thursday it still had concerns about Adani Group’s overall debt levels.
As for Adani Group as a whole, “we still stand by our original financial calculations and credit ratios, which leads us to remain concerned about Adani Group’s leverage,” CreditSights said in an email to Reuters.
Adani Group said on Thursday that its companies’ debt ratios “remain healthy and in line with industry benchmarks of the respective sectors”. Adani also said that over the past decade the group has worked to improve its “debt metrics through our capital management strategy”.
Shares of Adani Transmission and Adani Power closed up around 1% on Thursday, while five other group companies ended lower in a largely positive Mumbai market.
For Adani Transmission, CreditSights revised its earnings before interest, tax and depreciation (EBITDA), or underlying profit, estimated at 52 billion rupees ($652.45 million) from 42 billion rupees previously. For Adani Power, it revised its gross debt estimate to 489 billion rupees from 582 billion rupees.
He did not give a period for the assessments.
The combined market value of Adani Group’s seven publicly traded companies – flagship companies Adani Enterprises, Adani Wilmar, Adani Ports, Adani Green Energy, Adani Transmission, Adani Total Gas and Adani Power – has grown about tenfold in the last three years to about 251 billion dollars. .
($1 = 79.7000 Indian Rupees)