Suspense Crime Sach Ka Dam
Supporting the crisis-hit Adani Group, credit rating agency Crisil Ratings on Friday said the group has sufficient cash and operating cash flow to meet debt obligations and committed capital expenditure. The rating agency said that there has been no negative action from lenders and investors so far after the group’s founder chairman Gautam Adani was indicted in the US. Crisil said in its bulletin that the Adani Group has scope to reduce discretionary capital expenditure (capex) depending on developments in financial markets and future capital availability. It has better earnings before tax (EBITDA) and cash balance which reduces its dependence on external debt to maintain operations.
What is the matter
The US Department of Justice and the US Securities and Exchange Commission (SEC) filed an indictment and a civil complaint on November 20, 2024, in the US District Court for the Eastern District of New York against Gautam Adani, Sagar Adani, and Vineet Jain, key officials of Adani Green Energy Limited (AGEL). The charges relate to securities fraud, wire fraud, and violations of SEC guidelines that led to false and misleading statements regarding anti-bribery and anti-corruption policies in AGEL’s bond offering documents.
What did CRISIL say?
The rating agency said, “Crisil Ratings considered these developments and their potential impact on the financial strength of the group. The things considered include the decline in the market capitalization of the group’s listed companies, volatility in bond yields, and the cancellation of AGEL’s $600 million bond offering.” The agency also assigns credit ratings to the infrastructure and key (holding) units of the Adani Group. Crisil said, “These ratings depend primarily on the strength of their business and financial risk. They take into account, among other things, the stability of cash flows, the infrastructure nature of assets with long concession periods, and the extent of cash flows.”
Lenders did not take negative actions.on
The agency said, “Adani Group reported healthy pre-tax earnings (Ebitda) of Rs 82,917 crore for FY2023-24, with a net debt-to-Ebitda ratio of 2.19 times.” Based on the response of management and select lenders, the agency said, “Crisil Ratings is aware that even after these developments, there has been no negative action from lenders/investorsors yet.” The statement said, “Furthermore, we understand that the Adani Group has scope to reduce discretionary capital expenditure (capex) depending on the growth in financial markets and future capital availability.” Crisil said that the matter is sub judice and the Adani Group has sufficient cash and operating cash flow to meet the debt obligation and committed capital expenditure plans shortly.
