Adani Green's Liquidity In H1 FY25 Bolstered By Substantial Cash Reserves

Adani Green Energy Limited (AGEL) continues to demonstrate robust financial health, marked by high liquidity levels and a strong Ebitda performance in the first half of the ongoing financial year (H1 FY25). The company's liquidity position has been bolstered by its substantial cash reserves, which provide coverage for its borrowing needs and create a buffer against potential market fluctuations.

As of September 2024, AGEL, one of India's leading renewable energy companies, reported cash balances have remained strong, reaching Rs 10,209 crore. This gives AGEL a healthy cash-to-debt ratio, ensuring it is well-positioned to meet its financial obligations without straining its operational stability. The company's gross debt stood at Rs 61,826 crore, with net debt at Rs 51,617 crore.

Adani Green's trailing twelve-month Ebitda or earnings before interest, taxes, depreciation and amortisation, reached Rs 9,940 crore as of September 2024, reflecting consistent growth. The adjusted run-rate Ebitda for the period was slightly higher at Rs 10,709 crore. The performance is supported by the fact that nearly 90% of AGEL’s power supply is contracted, offering stability to its earnings.

AGEL’s liquidity strength has allowed it to maintain a net debt to Ebitda ratio of 5.19x, within acceptable limits for the energy sector. Moreover, with significant cash reserves, the company’s overall financial risk remains under control, despite its growing debt profile.

AGEL's credit rating has remained stable, with international agencies such as Fitch, Moody’s, and S&P maintaining a positive outlook. The company holds a BBB- rating from Fitch, Ba1 from Moody's, and BB+ from S&P for its Restricted Group structure, reflecting its sound financial management. AGEL’s domestic ratings are equally strong, with India Ratings and CRISIL assigning an AA-/Stable and AA+/Stable rating, respectively.

In terms of debt maturity, AGEL has a clear refinancing plan in place. The company expects to refinance a go-to-market facility of Rs 17,669 crore due in FY25, FY29, and FY31, using an amortising loan structure. Additionally, a $750 million bond, which matured and was fully redeemed in September 2024, demonstrates AGEL's ability to manage foreign debt effectively.

AGEL has significantly increased its capital deployment, with equity deployed rising from Rs 16,299 crore in financial year 2023 to Rs 35,623 crore in September 2024. This marks an increase of over 118% in just over a year, a testament to the company’s aggressive expansion strategy and its commitment to strengthening its asset base. The company’s gross assets have also grown substantially, from Rs 58,384 crore in FY23 to Rs 87,240 crore in FY24.

The company's gross debt-to-equity ratio, calculated at 1.39x in FY24, is balanced by its strong equity position. AGEL continues to focus on scaling its renewable energy capacity, with a major portion of its Ebitda contracted for long-term power purchase agreements (PPAs). This provides a steady cash flow that supports its high capital expenditure and strategic investments in solar, wind, and hybrid energy projects across India.

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