Adani Green's key debt ratio is set to improve, says Nomura Holdings

The Adani conglomerate has committed to invest a total of $70 billion by 2030 across its green energy value chain to become the world's largest renewable energy producer.

Gautam Adani
Gautam Adani. (Photo: Bloomberg)
Bloomberg
2 min read Last Updated : Aug 31 2022 | 12:44 AM IST
A key credit metric of Adani Green Energy Ltd. that ballooned as the firm’s billionaire-owner took on more debt will show a pull back in leverage, according to Nomura Holdings Inc.
 
The Abu Dhabi-based International Holding Co. has injected $500 million into Gautam Adani’s green company, which will help stabilize its debt-to-capital ratio in the low 60% range from 95.3% at the end of March, said Eric Liu, credit desk analyst at Nomura Holdings in Hong Kong.
 
IHC’s support “will be reflective when the company unveils its second quarter balance sheet details,” Liu said, noting that the infusion of funds shows Adani Green’s equity-raising capability. IHC has invested almost $2 billion in total in three companies owned by Adani. Second quarter financial results are expected around November. 
 
The Adani conglomerate has committed to invest a total of $70 billion by 2030 across its green energy value chain to become the world’s largest renewable energy producer. That makes Adani a key player in India’s quest to become carbon net-zero by 2070.

Still, Adani Green is one of the most leveraged companies in the tycoon’s empire, with Asia’s second-worst debt-to-equity ratio of 2,021%.
 
Though Liu said the Adani Group’s aggressive expansion is a “negative overhang for credit investors as much of the M&A recently has been debt-funded,” he noted that the conglomerate has demonstrated prowess at locking down external investors to shore up capital.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :Adani Green EnergyNomuraDebt

Next Story