Adani Group shares fall as much as 5% as report flags high leverage

Adani Group Share Price Today: Adani Group shares fell in afternoon trading today after credit rating agency CreditSights raised several concerns about the conglomerate’s business. Its stiff competition with Reliance Industries, led by Mukesh Ambani, could cause Adani Group to make reckless financial decisions, CreditSights said.

While shares of Adani Enterprises fell 4.03% to Rs 2,929.05, shares of Adani Ports and Special Economic Zone were trading down 4.06% to Rs 806 on BSE.

Other Adani Group shares were also trading in the red.

Shares of Adani Power were stuck in the 5% lower circuit at Rs 411.20 today and shares of Adani Transmission hit an intraday low of Rs 3,319, down 4.57% on the BSE.

While Adani Green Energy lost 6.9% to Rs 2,345.7, shares of Adani Gas fell 3.93% to Rs 3,240 on BSE. Shares of another Adani Group company, Adani Wilmar, fell 4.99% to Rs 687.7 on BSE.

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CreditSights said Adani Group has pursued an aggressive expansion plan over the past few years that has put pressure on its credit metrics and cash flow. The credit note indicated that the Adani Group was venturing into new and/or unrelated businesses, raising concerns that execution oversight was too dispersed.

The rating agency said: “As India’s two corporate sector mega conglomerates compete for market share in a few new economy businesses (e.g. renewable energy, telecoms), this could lead to reckless financial decisions on both sides, such as capex, aggressive bidding and over-leveraging Overall, RIL has been on a deleveraging trend over the past few years and is showing robust credit metrics (gross leverage and at 2.6x and 2.2x at the end of FY22) and hedge interest rates (7.8x at FY22),” further adding that Adani is highly leveraged and low interest and cash outflow coverage in almost all of its entities and is exposed to higher financial risk.

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CreditSights further highlighted that the Adani Group is exposed to moderate levels of governance and ESH risks. “In favor of the Adani Group, we are reassured by its strong banking relationships with national and international banks, which have been willing to lend the group significant sums for both its existing activities and its new businesses,” he said. he declares.

“Overall, we remain cautious about the group’s growing appetite for expansion, which is largely financed by debt. We retain our existing market performance recommendations on the two Adani entities under our cover, Adani Green Energy (AGEL) and Adani Ports and Special Economic Zone (APSEZ),” he said.

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