CRISIL Assures Stability For Adani Group Amid US Indictment

In a recent update, CRISIL Ratings provided reassurance regarding the financial health of the Adani Group, despite the ongoing legal challenges faced by its founder, Gautam Adani, and other executives. Following the indictment by the U.S. Department of Justice and the SEC over securities fraud charges, CRISIL affirmed that no negative actions have been taken by lenders or investors so far, signaling continued confidence in the conglomerate’s financial standing.

Adani Group’s Strong Financial Position

CRISIL emphasized that the Adani Group has sufficient liquidity and robust operational cash flows to meet its debt obligations and capital expenditure commitments. With a healthy EBITDA (earnings before interest, taxes, depreciation, and amortization) of ₹82,917 crore for FY 2024 and a manageable net debt-to-EBITDA ratio of 2.19 times, the group remains well-positioned to navigate financial pressures.

As of September 2024, the Adani Group holds over ₹53,000 crore in cash across its eight listed operating entities. This strong cash position, combined with long-term debt maturities of ₹27,500 crore and additional facilities, gives the group substantial flexibility to manage its finances through the coming years.

CRISIL also highlighted that Adani Group can adjust its discretionary capital expenditure (capex) based on market conditions and the availability of future capital. This flexibility allows the conglomerate to remain agile in its financial strategies, ensuring it can weather any external challenges or shifts in the financial landscape.

While CRISIL noted that the ongoing legal case involving Adani executives has not yet led to any adverse actions from lenders or investors—such as accelerated debt repayment or increased borrowing costs—the rating agency continues to monitor the situation closely. CRISIL acknowledged the potential risks posed by any future regulatory or judicial actions, which could impact the group’s access to capital markets or financing costs.

Looking ahead, CRISIL will keep a close eye on developments surrounding the Adani Group’s access to both domestic and international capital markets. Any significant regulatory actions, changes in financial flexibility, or increases in financing costs could significantly affect the group’s operations and long-term stability.