Adani Group’s Strong Moves Boost Financial Strength
Ahmedabad, 24 August 2023: The Adani Group has achieved a major milestone by making smart decisions that have improved its financial situation. By the end of the June quarter, the group had a significant amount of money, INR 42,115 crore, available. This was possible because the companies within the group focused on making their finances strong, which is really important for their big plans.
Here’s how they made things better:
- They put a lot more money into their projects, making the total amount of money they own compared to their total things (assets) more than half, which is 55.77%. This is a big increase from 40.16% a few years ago. They used INR 2,35,812 crore for this, which is a lot more than the INR 1,87,087 crore they owed.
- Their profit and the things they own (assets) grew a lot faster in the last few years (from FY19 to FY23). Their profit increased by 18.13% on average each year, and their assets grew by 21.7% each year. In the latest quarter, their profit went up by 42% compared to last year. This was more than 40% of their entire profit from last year. But the money they owed (debt) didn’t grow so quickly; it only went up by 14.56% on average each year. This means they are getting better at managing their money and debt.
- The money they owed compared to their profit (EBITDA) for the year (FY23) got lower. It went from 3.2 times what they make to just 2.8 times what they make.
- The things they own (assets) compared to the money they owed (debt) was 2.3 times at the end of FY23.
- The money they owed (debt) compared to the money they put into projects (equity) was only 0.8 times at the end of FY23.
- They were better at paying their debt; their debt coverage ratio got better. For the year FY23, they had more than twice the money they needed to cover their debt payments, which is a good thing.
- More than half of the profit they made came from businesses that are considered really safe to invest in. These businesses got really high ratings, which means they can easily get money from the stock market.
- The most important part of their profit came from businesses that help with essential things like infrastructure and utilities. These businesses made up 83% of their profit for the year FY23 and 86% for the latest quarter (June FY24). This is great because it means they have a strong and stable way of making money.
- They were really careful about where they got their money from. They didn’t depend too much on one place to get money. They got money from banks in different countries, from the stock market, and other places. This way, if something goes wrong in one place, they still have money from other places.
- They planned things in a smart way, so they had enough money even when they needed to pay back their debt. They made sure they had more time to pay back their debt than they needed, so they didn’t face any big problems.
- In simple words, they had a lot more money left after they paid all their expenses and taxes for the year FY23. This leftover money was 2.72 times more than the time they needed to pay back their debt. This means they are in a good position to manage their debt.
- They had a program where big investors gave them a lot of money for 10 years. Since 2019, they got more than USD 9.5 billion from this program. This helped them do important things, like paying off loans and doing other strategic things.
- The people who own the group (promoters) also get a lot of money by selling some of their shares in the company. They got INR 30,900 crore just from selling shares since March 2023.
In simple terms, the Adani Group has been making strong moves to have a lot of money, use it smartly, and make sure they can pay back what they owe. This makes them stable and ready for big plans in the future.
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