'Local lenders' exposure to Adanis expected to come down soon: Group executive

Mumbai: The exposure of Indian lenders to the Adani Group is likely to reduce once some of the conglomerate's current investments are complete and start generating cash flows, a senior group executive told ET.

"Funds were being spent on the copper plant, the roads business and the PVC business, where domestic banks and institutions participated in a big way," the executive said, requesting not to be named. "What will also happen is that when these assets come online, you will see a drop in exposure of Indian banks back to below 36%."

Local banks and non-banking financial lenders accounted for about 42%, or ₹107,985 crore, of the Adani Group's total borrowings of ₹258,176 crore as of September-end, compared with 36%, or ₹88,100 crore, at the end of March 2024. As on March 31, 2023, the group had 31% of its loans from Indian lenders.


Borrowing from domestic capital markets could go up to around 11% from the current 5%, while that from international capital markets could drop from 23% now, the executive said. Bonds sold in the global markets accounted for 29% of the group's total debt as of March 2024.

A little more than a fifth of the group's gross debt is currently held as cash balance, giving it enough liquidity to service debt for 28 months, the group said in a presentation Monday.

At the portfolio level, all the debt maturities will be covered by cash flow from operations and cash balances till 2033-34 (Apr-Mar), the group said. Each of its companies has sufficient liquidity to cover all debt servicing requirements for at least the next 12 months, the group said.

Big capital expenditure on its Navi Mumbai International airport, green energy projects and the Adani Energy Solutions business had led to the group's higher borrowings from international banks and institutions.

Global banks and bond markets together accounted for 50% of the group's total borrowings as of September-end, down from 55% at the end of March.

The group generated earnings before interest, tax, depreciation and amortisation of ₹44,212 crore for the first six months of the current fiscal year, up from ₹43,689 crore a year earlier. While Ebitda from the transport and infrastructure businesses saw substantial growth, that from the cement and utilities segments was lower, as per a company presentation.

The group is likely to post Ebitda of around ₹95,000 crore in the current fiscal year, the executive said. The Adani Group's gross debt rose by ₹16,882 crore in the six months through March 2024, while its gross assets in the same period increased by ₹75,277 crore, the executive said.