Adani Group adopts strategy to diversify its debt after Hindenburg crisis

livemint.com:

https://www.livemint.com/companies/news/adani-family-looks-to-raise-3-6-bn-via-sales-of-promoter-stakes-as-shares-of-group-firms-skyrocket-11724340339603.html The group’s financial health is evident from the improving liquidity position: the cash balance relative to gross debt increased to 24.8% in 2023-24 from 10.6% in 2018-19, indicating a comfortable cash cushion to meet debt obligations. The net debt-to-operating profit ratio eased from 3.81 times to 2.19 times, reflecting enhanced capacity to manage debt with operating income.

After the short-seller's report, the group significantly lowered pledges in a bid to restore investor confidence. Over the past year, the promoters have decreased pledge positions in six key companies.

But they have also raised stakes in several key companies, with almost 75% ownership in two cases, a concern raised by the Hindenburg report (a minimum 25% non-promoter float is seen as essential to mitigate manipulation and insider trading). Only now is the group reportedly mulling promoter stake sales.

“To reduce its debt leverage, the Adani Group has been proceeding smoothly with its capex plan. Moreover, with high promoter holdings, they are well-positioned to offload stakes if needed, further bolstering their financial flexibility," said Kranthi Bathini, director of equity strategy at Mumbai-based WealthMills Securities.

Also read https://www.livemint.com/opinion/online-views/succession-planning-gautam-adani-mukesh-ambani-reliance-adi-godrej-ratan-tata-cyrus-mistry-anand-mahindra-chandrasekaran-11722953410543.html The group went on an aggressive expansion spree earlier in this decade, with capital expenditure surging by 114% in 2020-21, followed by 20%-plus growth for two more years. But