Adani Group gets ready to raise up to ₹40,000 crore from retail investors, aims to hedge risks: Report

Adani Group plans to raise up to ₹40,000 crore from its retail investors over the coming three to four years to diversify funding sources and hedge risk, Moneycontrol reported on Thursday, September 5, citing people in the know.

Adani Enterprises on Wednesday launched its public issue of secured non-convertible debentures (NCDs) worth ₹400 crore. The debt instruments with tenures of two to five years offer an effective annual yield of 9.25-9.90 per cent and were fully subscribed on day 1, according to the report.

“The group plans to launch similar public issues (NCDs) for other group entities,” said one of the sources cited in the news report. “This will help reduce the group’s concentration of rupee loans from a limited set of lenders, which currently includes public and private sector banks,” the sources told the news portal.

Domestic lenders, which include banks and financial institutions, had an exposure of ₹88,100 crore to multiple Adani Group companies through long-term and working capital loans as of the year ended March 2024, as per the report.

Adani Enterprises has seen its debt increase in the financial year 2023-24. As per its latest investor presentation, the company's long-term borrowings increased to ₹43,718 crore in FY24, compared to ₹32,590 crore in FY23, marking a 34.14 per cent rise year-on-year, as per the report.

The organisation's short-term borrowings rose to ₹4,897 crore in FY24, compared to ₹4,244 crore in FY23. Adani Enterprises' cash segment improved to ₹8,523 crore, compared to ₹5,539 crore in the previous year, as per the report.

The company's net external debt was ₹29,511 crore in FY24, up 32.71 per cent from ₹22,237 crore in FY23, highlighting the increasing leverage and better liquidity.

Company's liquidity position remains robust

“Raising money from retail investors augurs well from a diversification perspective and will boost overall goodwill and public awareness of the group. This may also have a spillover effect on the group’s equity base by attracting more retail investors,” one of the sources told the news website. Adani Group have utilised foreign debt markets to raise capital and raise rupee loans from Indian banks. 

The report, citing investor presentations, highlighted the group's strong liquidity positions, stating that it has cash reserves to cover more than 30 months of debt payments.

The conglomerate also reported a 33 per cent rise in pre-tax profits for the April to June quarter from its strong infrastructure business and growth in emerging sectors. The rating firm ICRA estimates that the credit flow in the Indian economy from domestic sources will moderate to ₹24.5 lakh crore in FY25 compared to the previous year. The bond issuances are estimated to rise as the domestic debt market remains an attractive source of borrowing for large companies, as per the report.