Adani Group Plans To Trim Its Capital Spending Plan

The Adani Group is planning to trim its capital spending plans after pulling a Rs 20,000 crore equity fundraising plan last week, a news channel reported on Monday, citing people close to the development. 

While providing more collateral in the form of stock pledges to lenders, the group may alter its capex (capital expenditure) plans in some of its businesses. The Adani Group did not immediately respond to a Reuters comment. 

“At Adani, there is a rethink on the capex. The group may moderate its capex plans in some of the businesses. So, instead of targeted growth over 12 months, they may look at a time frame of 16-18 months for that quantum of growth in certain businesses,” the newspaper quoted. 

Now the Adani group will have alternative funding channels from internal accruals, promoters’ funding, and private placements to fund projects. In addition to this, the company’s domestic lenders do not plan to trim the conglomerate from utilising sanctioned but unused credit lines for fear it could backfire and lead to defaults. 

The Adani Group generates Rs. 57,000 to Rs. 60,000 crores EBITDA yearly. Nearly half is available in cash, which the group plans to use for capex, worth around $300 million over the next six months. 

The market value of Adani Group companies has slumped by almost half since the U.S. short-seller Hindenburg Research raised questions in January about the group’s debt levels and use of tax havens.