CRISIL Ratings has released a report reaffirming its strong credit ratings for Adani Group companies. Despite recent legal developments, including an indictment in the US and subsequent materially false and misleading coverage, the agency has maintained a positive outlook on the group’s companies and entities.
“The Adani Group has adequate liquidity and operating cash flows to meet its debt obligations and committed capital expenditure plans over the medium term,” the Crisil report said. The agency highlighted the group’s strong financial profile, strong business infrastructure and diversified infrastructure assets.
“These ratings are primarily driven by the strength of its business and financial risk profile,” the CRISIL report said. They consider, among other factors, the sustainability of cash flows, the infrastructure nature of the assets with long grace periods and the extent of the cash flow cushion,” noting that it has granted ratings to 28 entities in the group. For FY24, Adani Group reported a healthy EBITDA (earnings before interest, taxes, depreciation and amortisation) of around Rs 82,917 crore, with a net debt-to-EBITDA ratio of 2.19 times. The group’s cash balance across eight listed operating entities is over Rs 53,000 crore as of September 2024. Additionally, CRISIL noted that certain entities of the Adani Group benefit from their association with the largest conglomerate, which is one of India’s leading infrastructure groups.
This connection provides additional flexibility and support. Emphasizing the group’s diverse infrastructure portfolio, spanning sectors such as energy, transport and utilities, the report noted that the group’s strong market position and its ability to adjust capital expenditure contribute to its financial flexibility. The report says that while recognizing the potential impact of the ongoing legal proceedings, the agency will continue to closely monitor the situation and any potential regulatory, judicial or government action that may affect the group’s financial position and operations.
