Fitch Group unit softens tone on Adani Group debt, corrects data

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Fitch Group unit CreditSights said it discovered miscalculations in its recent report on the debt of two power and transmission companies controlled by India’s richest person, Gautam Adani. following a conversation with management. Its report last month called the conglomerate “deeply overleveraged” and flagged other risks.

In a note released following a call with the conglomerate’s management, CreditSights cited high leverage at one unit and the risk of future acquisitions hurting its credit profile at another. But there was no mention of the word “deeply”, and the Fitch Group unit also corrected a profit and debt figure for Adani Transmission Ltd. and Adani Power Ltd. respectively.

For Adani Transmission, CreditSights corrected its earnings before interest, tax and amortization (EBITDA), or core profit, estimated at 52 billion rupees ($652.45 million) from 42 billion rupees earlier. For Adani Power, it corrected its gross debt estimate to 489 billion rupees from 582 billion rupees.

“These corrections have not changed our investment recommendations,” wrote the analysts, including Pramod Shenoi. The debt research firm said in a Wednesday, Sept. 7 report that it spoke with Adani Group’s finance and other officials and reconciled some numbers for Adani Transmission and Adani Power.

Under Adani, now the world’s third-richest person, the group quickly diversified from its coal-based business into a myriad of unrelated sectors, including airports, data centers, digital services and media. . Much of this growth has been fueled by debt.

The Adani Group claims that the debt ratios of its companies are healthy. Earlier this week, the Gautam Adani-led conglomerate said its companies had deleveraged. “Companies have consistently deleveraged as the net debt-to-Ebitda ratio fell from 7.6 times over the past nine years to 3.2 times, the conglomerate said.

Adani has spent the past few years expanding his conglomerate from coal to ports, venturing into everything from data centers to cement, media and alumina. The group now owns India’s largest private port and airport operator, town gas distributor and coal miner.

The Adani Group has seven publicly traded companies – Adani Flagship Companies, Adani Wilmar, Adani Ports, Adani Green Energy, Adani Transmission, Adani Total Gas and Adani Power.

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