The Adani group is ‘deeply overleveraged’, cautions CreditSights

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Editor's note: Billionaire Gautam Adani’s debt-fuelled growth plans have made his group “deeply overleveraged”, which could spiral into a “massive debt trap” and default of one or more group companies, said financial research firm CreditSights in a report released on Tuesday. CreditSights is a unit of Fitch Group, which is the parent company of credit rating agency Fitch.  “The group has been investing aggressively across both existing and new businesses, predominantly funded with debt, resulting in elevated leverage and solvency ratios. This has understandably caused concerns about the group as a whole, and what implications it could have on the group companies that are bond issuers,” the report noted. Even though CreditSights retained “market perform” recommendations on two of the group’s entities under its coverage—Adani Green Energy and Adani Ports and Special Economic Zone —shares of the two companies, along with those of its four listed companies, fell by up to 7% in early trade, even as the overall market remained positive.  The report is a rare indictment of the group’s otherwise indomitable growth under Adani, the world’s fourth-richest person who has …