Adani Ports to repay ₹5,000 crore debt, to halve capital expenditure

Adani Ports & Special Economic Zone Ltd., India’s largest private sector ports operator, said it would roughly halve its capital expenditure next financial year, compared with the current year.

Adani Ports & Special Economic Zone Ltd. will repay debt of around ₹5,000 crore, helping tycoon Gautam Adani’s firm to improve a leverage metric at a time when its financial health is under scrutiny.

Adani logo and decreasing stock graph is seen in this illustration. (REUTERS)

The debt payment will take place in the year starting in April. It will improve the ratio of net debt to earnings before interest, taxes, depreciation, and amortization ratio to about 2.5 times, the company said in an earnings statement on Tuesday. The ratio stands at just over 3 times currently.

India’s largest private sector ports operator also said it would roughly halve its capital expenditure next financial year, compared with the current year.

News of the debt payment comes just a day after the billionaire and his family prepaid $1.11 billion worth of borrowings backed by shares to allay investor fears. The finances of Adani Group firms have come under scrutiny after US short-seller Hindenburg Research levied accusations of accounting fraud and market manipulation at the conglomerate, wiping more than $100 billion from its market capitalization.

Adani Group has repeatedly denied the charges.

The Adani Ports guidance “could ease concerns around the firm’s liquidity and debt, though governance and regulatory risks are likely to linger,” Bloomberg Intelligence analyst Sharon Chen wrote. “This could also offer assurance that it might not materially increase related-party loans to support the rest of the group, as free cash flows have been earmarked for debt repayment.”

The company reported a 16% drop in profit to ₹13.2 billion for the three months to December, lower than the analysts estimate of about ₹15 billion.