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CreditSights finds errors in debt report on India's Adani group

Stock Markets Sep 08, 2022 11:50PM ET
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© Reuters. FILE PHOTO: FILE PHOTO: The logo of the Adani Group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. REUTERS/Amit Dave/File Photo/File Photo

(This September 7 story corrects to Fitch Group, not rating agency Fitch, in first paragraph)

By Krishna N. Das

NEW DELHI (Reuters) - CreditSights, part of the Fitch Group, said it had discovered calculation errors in its recent debt report on two power and transmission companies controlled by India's richest person, Gautam Adani, after a conversation with the management.

Debt research firm CreditSights' report late last month calling the conglomerate "deeply overleveraged" and flagging other risks had sent shares of many Adani companies down.

In a report dated Sept. 7, CreditSights said that it had spoken with Adani Group's finance and other executives and reconciled some figures for Adani Transmission and Adani Power.

"(Adani's) Management views that the group's leverage is at manageable levels, and that its expansion plans have not been mainly debt funded," CreditSights said.

But CreditSights said on Thursday it still had concerns about the Adani group's overall debt levels.

For the Adani group as a whole, "we still stand by our original financial calculations and credit ratios, which leads us to remain concerned over the Adani Group's leverage," CreditSights said in an email to Reuters.

The Adani Group said on Thursday debt ratios of its companies "continue to be healthy and are in line with the industry benchmarks of the respective sectors". Adani also said that over the past decade, the group had worked to improve its "debt-metrics through our capital management strategy".

Shares of Adani Transmission and Adani Power closed up around 1% each on Thursday, while five other group companies ended lower in a broadly positive Mumbai market.

For Adani Transmission, CreditSights corrected its earnings before interest, tax and amortisation (EBITDA), or core profit, estimate to 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.

It did not give the period for the estimates.

The combined market value of the Adani Group's seven publicly traded companies - flagship Adani Enterprises, Adani Wilmar, Adani Ports, Adani Green Energy, Adani Transmission, Adani Total Gas and Adani Power - has increased about tenfold in the past three years to about $251 billion.

($1 = 79.7000 Indian rupees)

CreditSights finds errors in debt report on India's Adani group
 

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Comments (2)
Afzal Ali
Afzal Ali Sep 08, 2022 7:32AM ET
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LOL, india is on sale and Adani is the current owner.
Subramanya Karanth
Subramanya Karanth Sep 08, 2022 7:32AM ET
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NO LOL he wants to buy pakistan as early as possible.
Mukesh Jasani
Mukesh Jasani Sep 07, 2022 11:10PM ET
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which mistake is it positive or negative
A K Gamer
A K Gamer Sep 07, 2022 11:10PM ET
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Negative
Subramanya Karanth
Subramanya Karanth Sep 07, 2022 11:10PM ET
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It's not good, but also very danger if defaults.
 
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