Debt on Adani Group is very high???
Adani Group: Debt on adani Group is very high, pressure has increased due to aggressive expansion, risk of default on companies
Seven companies of the adani Group are listed on the stock exchange. Of these, six companies had a debt of Rs 2.3 lakh crore by the end of 2021-22. Net debt after withdrawal of cash is Rs 1.73 lakh crore.Adani Group, involved in various businesses ranging from ports to cement, has taken a lot of debt. It is being used to invest aggressively in existing and new businesses. Fitch Group arm Credit sites said in a report on tuesday that more ambitious debt-funded development plans could turn into a bigger debt trap if the situation worsens. In such a situation, one or more companies of the group may default.
Adani is the second largest industrial conglomerate in the country after the Tata group. The total market capitalization till monday stood at Rs 19.74 lakh crore. reliance Industries, the third largest industrial conglomerate, has a market cap of Rs 17.94 lakh crore.
The group began operations in the 1980s as a commodity trader. Then ventured into areas like mines, ports, power plants, airports, data centers, and defense. It recently forayed into alumina manufacturing with cement by acquiring the indian units of Holcim for $10.5 billion.
The report mentions the expansion of the group in areas where there is no prior experience or expertise. These include copper refining, petrochemicals, telecommunications, and aluminum production. New business units that are believed to be unable to make profits for a few years usually cannot repay loans immediately.