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Adani Group prefers to borrow from global bond markets

Jan 27, 2023

By: BlinkX Research Team

Establishing huge conglomerates in manufacturing comes with a heavy price in the form of perennial capital requirements. One such group that has seen a sharp rise in debt levels in the last 3 years has been the Ahmedabad based Adani group. Total debts of the Adani group cross the Rs2.10 trillion mark and is among the most levered companies in India among the big groups. 

The real story is something different. While Adani group has seen the share of bank loans pick up, the share of banks in Adani debt is lower than the average of the top 5 companies. For instance, the top 5 companies in India have 40% of their debt coming from the banks. In comparison, the share of bank debt in the books of Adani is lower at just about 30%. The share of private banks is much smaller with a debt exposure of less than 10% of the total group debt. Even in the case of major lenders to Adani group, like ICICI Bank and Axis Bank, the loans are backed by the port and airport assets of the group.

The total debt of the Adani group has doubled in a span of just 3 years. However, the share of banks in the overall group debt has seen material reduction, with most of the borrowings coming from global borrowings. IN fact, out of the Rs1 trillion accretion in debt of the Adani group in the last 3 years, only Rs 15,000 crore has come from the banks, with the rest coming from domestic and international bond issues. For some of its iconic purchases like ACC and Ambuja, the Adani Group has taken most of their incremental funding for such acquisitions from overseas sources as well as bonds.