- Date : 09/06/2023
- Read: 3 mins
After the Adani Group reduced its outstanding debt, it is planning on raising a fresh debt totalling $2 billion through the issuance of green bonds. This news has put the spotlight on the group’s stocks.
- Adani Group might raise $2 billion through a fresh issue of sustainability-linked bonds
- The news has brought three group companies’ stocks into focus
- Previously, Adani had repaid a massive chunk of its debt to win investor’s confidence
The Hindenburg report wreaked havoc on the Adani Group’s market credibility bringing down the market value of most of its shares. As the company was reeling under the negative publicity caused by the report, it started reducing its debt burden through a $2.65 billion repayment plan.
Consequently, Adani Group managed to control its leveraged positions and reported positive financial metrics in the latest quarterly results. Have a look –
- Net debt to EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) ratio reduced to 3.27 in the financial year 2023. In 2022, the ratio stood at 3.81.
- The run rate EBITDA grew to ₹66,566 crores in the financial year 2023 from ₹50,706 crores reported in the financial year 2022.
- The cash balance grew by 41.5% in the financial year 2023 to stand at ₹40,351 crores.
Adani Group’s New Fundraising Plan
While the financial year 2023 proved good for the Adani Group, the conglomerate plans on raising fresh debt to the tune of $2 billion. The company intends to issue green and sustainability-linked bonds to raise the desired funds.
The company had earlier issued foreign currency sustainability-linked bonds in 2021. Adani Electricity Mumbai Limited (AEML) managed to raise $300 million worth of debt through these bonds. The fundraising was a part of the group’s mega plan of raising $2 billion through global medium-term notes.
Earlier, in May 2023, a report pointed out that three main Adani Group Companies – Adani Transmissions, Adani Green Energy, and Adani Enterprises might raise a debt of $3 billion to $5 billion. However, no new bonds have been issued till now and the latest fundraising plan is the recent news to do the rounds.
Impact of the New Fundraising Plan
While the group might launch its bonds, one of the company’s financial backers, International Holding Company, does not intend to invest in such bonds. International Holding Company is an Abu-Dhabi-based entity that had previously invested in Adani’s FPO (Follow-on Public Offer) after the Hindenburg report discouraged full subscription of the FPO.
However, the news of the company’s new fundraising plan has already brought its shares to the limelight. As the market opened on 8th June 2023, the scrip of Adani Ports & SEZ, Adani Transmission, and Adani Green Energy were commanding large trading volumes with positive momentum.
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The bottom line
If you have invested in Adani Group stocks or are planning to do so, keep an eye out for the stock price movements of the group companies. Invest in potential stocks to earn attractive returns on investment as the company rebuilds its market capitalisation.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.