Can the Adani Group digest its debt?

Jagadeesh Tamilselvan 15 Jun 2021 136

While the Group, led by the second richest Indian, prides itself as a contributor to nation building, its borrowings are beyond comfort zone..

The downfall of Adani did not happen automatically. A news story was published in Business Line magazine 3 months ago. Many immediately warned. But Adani became the richest man in Asia.

 The message said:

• Their debt is very high compared to Net Income.

• Some businesses charge more interest than profit.

• Adani Group's stock is overvalued in the stock market.

Now, 3 FPI investments that led to overestimation have been disabled.

 The amount is Rs 43,000 crore. So the stock has fallen.

 The loss is spread by the fall of the stock. However, it is also a time of crisis for the banks that have lent to Adani.

 Adani's corporate commentary may feature in media reports. They are able to lift the lost image.

 But, the frantic flow towards extreme profit must be controlled. That is the starting point of the problem. It doesn’t even happen in a day.

If the volcano closes on the right side, the middle side will erupt.




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