Adani Ports and Special Economic Zone has announced plans to prepay Rs 1,000 crore in March commercial papers (CPs). In addition, on Monday, the company repaid Rs 1,500 crore to SBI Mutual Funds on CPs that matured.
According to the spokesperson, the amount used for the part prepayment came from the company’s cash balance and funds generated from business operations. “This part prepayment is from the existing cash balance and funds generated from business operations,” a company spokesperson explained.
“This demonstrates the market’s confidence in the group’s prudent capital and liquidity management plan,” the spokesperson added.
According to data from information service provider Prime Database, Adani Ports has CPs worth Rs 2,000 crore that are due to mature in March. According to its most recent quarterly report, it had Rs 6,257 crore in cash and cash equivalents as of December 31.
Adani Ports said in an analyst call earlier this month that it is considering repaying about Rs 5,000 crore in debt in FY24.
While the company did not disclose which bonds it would repay, the move is intended to calm investors who were alarmed by a damning report by US short-seller Hindenburg Research. The move is expected to reduce its net debt to EBITDA ratio from more than 3 to around 2.5.
As a result of the Hindenburg report, all of Gautam Adani’s listed companies are attempting to reduce debt, demonstrating that none of them face any material refinancing risk and have a strong cash flow.
Although the group has repeatedly dismissed the Hindenburg report, it has done little to calm the larger investor and shareholder community. The Adani Group is now pursuing a multi-pronged strategy to address the crisis, particularly through debt reduction.
Adani Ports’ stock rose more than 2% in early trading following the announcement. Other Adani Group companies’ shares were mixed, with a few hitting the lower circuit and others rising nearly 5%.
