Adani Group assures 'enough cash flows' amid US allegations fallout

By P R Sanjai

 

  India’s Adani Group said it has enough cash flows to service debt obligations, as it sought to reassure creditors after a US bribery probe against founder Gautam Adani triggered a selloff in the conglomerate’s stocks and bonds. 

Cash balances exceed long-term debt repayments for the next 28 months, while portfolio level cash balances were at $6.33 billion, the port-to-power conglomerate said in a report for the first six months of the financial year ending March 2025 released Monday.

 

It said gross assets to net debt ratio improved to 2.7 times during the first half of the current fiscal year compared to 2.63 times in the previous year. 

 

The report is the Adani Group’s first substantial attempt at managing the fallout from a shock indictment from US federal prosecutors last week that accused Asia’s second-richest man and others of driving a $250 million bribery scheme related to solar energy contracts. The indictment wiped almost $27 billion from the group’s market value at one point, has driven a decline in its dollar bonds and forced one of its entities to cancel a $600 million bond offering.

 

The group dismissed the allegations as baseless and has said it would seek all possible legal recourse. A top executive Saturday said the group would respond to the US allegations after a detailed review of the legal filing and after advise from its counsel.

 

The group said 62 per cent of its total revenue and 84 per cent of earnings before interest, tax, depreciation and amortization were derived from its core infrastructure business.

 

Showcasing a stronger cash position is necessary for the group to convince creditors about its business fundamentals, as it faces a new hurdle just as it was recovering from a stinging short-seller report last year. The January 2023 report by Hindenburg Research, which claimed Adani manipulated its stock price and committed accounting fraud, had wiped out at more than $150 billion in market value from its listed companies at one point. Adani has vehemently denied those claims.