The Adani group on Wednesday cited healthy cash reserves that will enable it to clear its whopping debt of more than Rs 2 lakh crore over a period of time. Adani indicated it is comfortably placed to repay its obligations from its cash reserves. It said there is no material re-financing risk or near-term liquidity requirement as no large debt is maturing now.

The group estimates cash flow from its various assets across the six listed entities to be Rs 44,078 crore while the debt to be serviced stands lower at Rs 23,590 crore, which gives a debt-servicing coverage ratio — a measure of a company’s ability to repay its loans — of nearly 1.9. While debt servicing of at least 1 implies a positive cash flow, many banks prefer it should be at least 1.25.

The conglomerate is betting on the fact that more than 81 per cent of its EBITDA (earnings before interest, taxes, depreciation & amortisation) comes from its core infrastructure business which provides assured and consistent cash flow generation. In a credit note released to the stock exchanges, the group estimated its gross debt will be at Rs 2,27,235 crore in the current fiscal, up from Rs 1,88,275 crore in 2021-22.

The gross debt stood at Rs 2,26,030 crore in the September quarter, a sign the group is pursuing a debt-fuelled strategy for growth. The group is reportedly in talks with Abu Dhabi’s International Holding Corp (IHC) for a capital infusion of up to $1.5 billion. Sources close to the conglomerate said that there were no updates on the proposed investment. If the group is successful in getting the cheque it could be used to prepay debt and fund expansion plans.

Among the listed firms, Adani Ports and Special Economic Zone will have to pay the most in the present quarter at Rs 4,391 crore. Adani Port’s gross debt at the end of this financial year is estimated at Rs 44,500 crore up from Rs 42,750 crore in September. The debt service coverage ratio is projected at 1.32 times after considering a cash flow of Rs 8,430 crore. Dues of group flagship Adani Enterprises are set at Rs 2,482 crore in the fourth quarter and Rs 4,258 crore in the next fiscal. The debt service coverage ratio is 2.20 times based on a cash flow of Rs 7,091 crore. The group’s cash & cash equivalents rose to Rs 31,646 crore in the December quarter from Rs 29,754 crore in the preceding three months.

Mixed stocks trend

The stock of Adani Enterprises ended with gains of 1.61 per cent on Wednesday, while group companies Adani Transmission, Adani Power, Adani Green and Adani Total Gas continued to be locked at the lower circuit of 5 per cent. Others stocks rose, with NDTV up 4.70 per cent, ACC 1.13 per cent and Ambuja Cements, 2.36 per cent.