Mumbai: The Adani Group has successfully reduced its cost of capital by 104 basis points, bringing it down to 8.18% in FY25. This significant financial shift has been attributed to multiple credit rating upgrades, a strengthened earnings profile, and a resilient business model that has withstood market fluctuations.
In a recent investor meeting, Adani officials highlighted that credit rating agencies have acknowledged the conglomerate’s improved financial stability. Last month, CRISIL upgraded Adani Power’s rating to ‘AA’ and revised Adani Green Energy’s outlook from ‘Stable’ to ‘Positive’.
For a capital-intensive company like Adani, even a 50 basis point reduction in borrowing costs can significantly lower long-term project expenses. The group emphasized that this decline in borrowing costs would lead to a reduction in the total cost of a 20-year infrastructure project by 10-15%.
The Adani Group’s earnings have grown exponentially, with its run-rate EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) surging nearly fourfold from ₹25,389 crore in FY19 to ₹91,693 crore as of December 2024. Additionally, 75% of the group’s profits now come from assets rated ‘AA-’ and above, a significant improvement from 48% in FY19.
The company also reported a reduction in leverage, with its net debt-to-EBITDA ratio standing at 2.46x, marking an all-time low. This ensures financial stability despite the group’s aggressive expansion plans.
Looking ahead, the Adani Group has committed to investing over $100 billion (₹8 lakh crore) over the next 10 years. Group CFO Jugeshinder (Robbie) Singh assured investors that the conglomerate’s businesses are cash flow positive and self-sustaining.
“We don’t need any external capital—either debt or equity—for our planned business expansion. Our businesses generate sufficient cash flow to fund the entire $100 billion investment,” Singh said.
Singh further broke down the financial projections, stating that Adani’s business operations are expected to generate approximately $71 billion over the next decade. Ongoing projects under construction will contribute an additional $41 billion, and the company currently holds $6 billion in free cash reserves.
The company has scheduled debt maturities of approximately $21 billion over the next 10 years. Even after meeting these obligations, Adani is expected to have close to $97-98 billion in available funds, aligning with its investment plans.
Singh emphasized that the group could meet all debt maturities without refinancing, ensuring financial stability and growth. “We will only consider additional investments beyond $100 billion, if necessary, but we have not made any such decision yet,” he said.
With a strong financial footing, improved credit ratings, and a massive investment plan, the Adani Group remains committed to its long-term growth strategy while maintaining fiscal discipline.
