Adani Ports shares rise as Adani group firm looks to prepay Rs 1,000-cr short-term debt

Shares of Adani Ports & Special Economic Zone (Adani Ports & SEZ) gained in Tuesday's trade amid reports the Adani group firm was looking to prepay a short-term debt due next month amounting to Rs 1,000 crore to win back investor confidence after Hindenburg Research's scathing report in January.

Adani Ports & SEZ will prepay the debt raised through commercial paper after it repaid Rs 1,500 crore of similar debt to SBI Mutual Fund due on Monday as scheduled, a company’s spokesperson said. India’s largest-private-sector ports operator used its cash balance and funds generated from business operations to pay its short-term debt due on Monday.

The scrip rose 1.87 per cent to hit a high of Rs 590.50 on BSE.

"Adani Ports shared Rs 2,000 crore  of undrawn lines of credit, another Rs 6,000 crore of potential NCD issuances and scope of securitising up to 80 per cent of its fixed asset base, should the need arise to repay/prepay its existing debt commitments," Kotak Institutional Equities said in a note.

Earlier this month, Adani Ports CEO Karan Adani said the firm expects to repay loans, including bonds, worth Rs 5,000 crore next financial year. Its cash and cash equivalent were Rs 6,257 crore as of Dec. 31, while its net debt was Rs 39,277 crore.

"APSEZ is targeting FY24 Ebitda of Rs 14,500 crore-15,000 crore. Besides an estimated capital expenditure of Rs 4,000 crore-Rs 4,500 crore, we are considering total loan repayment and prepayment of around Rs 5,000 crore, which will significantly improve our net debt to EBITDA ratio and bring it closer to 2.5x by March 24," said Adani said.\

At an institutional investor conference, Adani Ports maintained its revenue and growth guidance for FY2023 but hinted at missing the volume guidance of 350 million tonnes, Kotak Institutional Equities noted. Adani Ports expects 335 million tonnes or 8 per cent comparable YoY  growth for the year.

The company hinted at the potential of doing closer to 400 million tonne in FY2024 on the back of a higher than 8 per cent organic growth and inorganic/addd-on growth support (Haifa, Karaikal, Vzhinjam).

It expects the Haifa Port acquisition to have a positive impact on its leverage levels, given a large Rs 5,000 crore of cash levels that it would consolidate. From a leverage perspective, the company also hinted at prospects of an increase in payables and static receivable levels, Kotak said.

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