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Adani Group Is 'Deeply Overleveraged', Claims Report
Writer: Snehadri Sarkar
While he is a massive sports fanatic, his interest also lies in mainstream news and nitpicking trending and less talked about everyday issues.
India, 24 Aug 2022 5:27 AM GMT
Editor : Shiva Chaudhary |
A post-graduate in Journalism and Mass Communication with relevant skills, specialising in content editing & writing. I believe in the precise dissemination of information based on facts to the public.
Creatives : Snehadri Sarkar
While he is a massive sports fanatic, his interest also lies in mainstream news and nitpicking trending and less talked about everyday issues.
The Adani Group, on August 23, also acquired a 29.18% stake in television news channel NDTV Ltd and stated that it would launch an open offer as required by the SEBI to buy 26% more in the company.
Indian billionaire industrialist Gautam Adani's ports-to-power-to-cement conglomerate is "deeply overleveraged", with the company primarily using debt to invest aggressively across existing and new businesses, a Fitch Group unit by the name of CreditSights claimed on August 23.
In a recent report captioned 'Adani Group: Deeply Overleveraged', CreditSights claimed: "In the worst-case scenario, overly ambitious debt-funded growth plans could eventually spiral into a massive debt trap, and possibly culminate into a distressed situation or default of one or more group companies."
Overleveraged Adani Group
Beginning as a commodities trader in the 1980s, the Adani group has diversified from ports, mines, and power plants into defence, airports and data centres. Lately, the group also made a massive venture into the cement sector with a $10.5 billion purchase of Holcim's India units and into alumina manufacturing. However, this business expansion has reportedly been funded by debt.
CreditSights, in its report, also added that in the past few years, the Adani Group had pursued an aggressive expansion strategy that has massively pressurized its cash flows and credit metrics, reported NDTV.
It added that the Adani Group is also making ventures into new and/or unrelated businesses, which are significantly capital intensive and increase concerns about spreading execution oversight too thin.
While there is proof of promoter equity capital addition to group companies, the Adani Group is exposed to moderate levels of governance and environmental, social, and governance (ESG) risks.
Adani Group Buys Stake In NDTV
The Adani Group, on August 23, acquired a 29.18 per cent stake in television news channel NDTV Ltd and stated that it would launch an open offer as required by the Securities and Exchange Board of India (SEBI) to buy 26 per cent more in the company, reported The New Indian Express.
The Gautam Adani-led group, which had stated it would acquire 49 per cent in digital news provider BloombergQuint earlier in May this year, plans to further boost its media investment with a television channel under its belt.
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