Adani's debt burden increased by 21% in FY23 despite reassurances

Just months ago, the Adani conglomerate was visible in every walk of life from ports to airports, and from power distribution to cooking oil. But Adani's spectacular 2,500 per cent rise in five years was reversed by the Hindenburg Research report, which accused it of fraud and sent stocks crashing down.

After losing $140 billion in market value, Adani has tried to reassure investors by prepaying loans, but its debt piled up by 21 per cent in a year despite that.

Still far from a full recovery

• Apart from the rise in borrowings, the proportion of loans from overseas lenders also went up to almost 30 per cent of the debt.

• At the same time the group's ability to pay back debts in time have also improved according to the report by Bloomberg.

• Adani may have started a recovery from the Hindenburg-induced stock market rout after a Rs 15,000 crore share sale, but its stocks and dollar bonds are still affected by the selloff.

Debt piling up despite reassurances

• Although Adani has been making claims about cutting debt ever since it had been called overleveraged in a CreditSights report last year.

• But its borrowings have only gone up to Rs 2.3 lakh crore in FY23, as the conglomerate has been expanding aggressively into sectors such as cement and green energy.

• But after the Hindenburg fiasco, Adani has slowed down on petrochemicals, metals, and roadways, to focus on power and ports.

• Ratings agency Moody's has also raised concerns about the higher borrowing costs after recent events and refinancing risks in the years to come.