Inter-group transactions, debts once again weigh on Adani Ports stock

While the stock trades at 30-35% discount to its historic valuation, inter-corporate transactions and debt remain an overhang

Adani Ports and Special Economic Zone (Adani Ports) is among the most sold stock by domestic investors in February 2019, according to the recent data. 

For analysts who were always wary of the company’s debt levels, inter-group loans and advances, and shareholding pledged by its promoters, these concerns once again resurface with the Adani Agri Logistics’ (AAL) acquisition. 

The deal hasn’t been welcomed by analysts despite it promising inroads into the logistics sector, given that AAL has 45 per cent market share in modern agri-storage infrastructure. The deal’s value at 11.6 times enterprise value to earnings before interest and tax,