Countering Swamy’s NPA jibe, Adani says servicing debts regularly

In a strong rebuttal to BJP leader Subramanian Swamy alleging billionaire businessman Gautam Adani to be the “biggest NPA trapeze artiste in PSU (banks),” the Adani Group clarified that it has been regularly servicing the debts taken from public sector banks.

The Adani Group on Tuesday said that the “Group’s dependence on PSU banks for long-term borrowings is less than 50 per cent at about ₹34,000 crore and is regularly serviced. Adani Group has created world-class assets and aggregate net asset block of Indian operations stands at over ₹1,10,000 crore.”

Swamy, in a tweet earlier on Tuesday, levelled allegations on the promoter of Adani Group for its mounting debts. “The biggest NPA trapeze artiste in PSUs is Gautam Adani. It is time he is made accountable or a PIL is inevitable,” Swamy stated through his micro-blogging handle.

To this, Adani rushed to clarify, “The Adani Group has a history of implementing world-scale infrastructure projects within a short time and the lowest cost quartile. Capital-intensive projects necessarily require debt capital.

“The singular critical test for debt is its regular servicing — something which the Adani Group has implemented diligently, since its inception. One must also look at the financial metrics of the Group,” an official statement from the company said.

Well diversified

Having interests in agri-business, energy, ports, power generation and transmission, and mining, the Group has four of its companies listed on the stock exchanges, including the flagship Adani Enterprises (AEL), Adani Ports and SEZ (APSEZ), Adani Power (APL), and Adani Transmission (ATL).

“Aggregate net worth of the listed entities stands at over ₹40,000 crore and aggregate EBIDTA stands at ₹24,000 crore,” Adani said.

Notably, Adani Group’s power venture, APL, has been facing headwinds, especially after the Supreme Court in April 2017 denied the company the right to charge compensatory tariff for its Mundra power plants due to higher international coal prices.

To flag the crisis, APL, in August last year, had offered 51 per cent stake in the Mundra power project for ₹1 to the Gujarat government’s power utility Gujarat Urja Vikas Nigam (GUVNL).

APL posted consolidated net loss of ₹6,174 crore for fiscal 2016-17 on net sales of ₹22,784 crore. For the third quarter (October-December 2017) of the current fiscal, the company registered a consolidated net loss of ₹1,280 crore on net sales of ₹4,844 crore. In January 2018, Group Chairman Gautam Adani had commented about the troubled Mundra power plant: “Under-recovery of fuel costs for Mundra project has impacted its financial viability, and we are in dialogue with key stakeholders for an early solution.”

The flagship AEL registered consolidated net profit of ₹808 crore on net sales of ₹37,313 crore in FY17. Ports operator APSEZ posted consolidated net profit of ₹3,892 crore on net sales of ₹8,439 crore, while transmission arm ATL’s net profit stood at ₹416 crore on net sales of ₹2,879 crore.

High credit rating

“Our operating performance is such that the transmission and port businesses have been rated ‘investment grade’ by international credit rating agencies.

“Also, almost all of our companies enjoy a high credit rating from domestic rating agencies,” the company stated in response to Swamy’s allegations.

“Given our rating track record, different sources of debt are available to the Group, ranging from international bonds, ECB loans, domestic bonds, loans from private sector as well as public sector banks in India,” it said.

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