Adani Ports and Special Economic Zone Limited (APSEZ) is an Indian multinational conglomerate company headquartered in Ahmedabad, India.
It is a part of the Adani Group and operates the largest private port in India. APSEZ develops, operates, and manages ports, as well as provides integrated logistics solutions.
The company has operations in several locations across India, including Mundra, Dhamra, Hazira, Kattupalli, and Ennore.
According to Karan Adani, whole-time director, and chief executive officer, Adani Ports will also be seeking to invest Rs 4,500–4,500 crore as capital expenditure in 2023–2024.
According to a statement released on February 7 by Karan Adani, the company’s full-time director, and chief executive officer, Adani Ports and Special Economic Zone plans to pay off its debt of Rs 5,000 crore by the following fiscal year 2023–2024.
“We are contemplating a total repayment plan and term deposit of around Rs 5,000 crore,” said Karan Adani in a prerecorded message. “This will dramatically improve our gross investment ratio and bring it closer to 2.5x by March 2024.”
The announcement by Adani Ports and Special Economic Zone to reduce debt in 2023–2024 came at a time when the entire Adani Group was thrown into crisis as a result of a report by US-based Hindenburg Research that claimed there were holes in the group’s financials, a high debt burden, and overvaluation.
The group was forced to cancel its Rs 20,000 crore follow-on share sale as a consequence of the plunge in share prices of the group’s companies.
Adani Ports will also be looking to invest Rs 4,000–4,500 crore as capital expenditure in 2023–2024, according to Karan Adani. This is in addition to debt reduction.
The Mudra Port of Adani Port will be expanded primarily with the help of capital expenditure.
According to Karan Adani, Adani Ports will also aim to boost its earnings before interest, depreciation, tax, and amortization (EBITDA) in 2023–24 to between Rs 14,500 and Rs 15,000 crore in the following fiscal year.
This compares to the estimated range of Rs 12,200–Rs 12,600 crore for FY23.
According to the company statement, APSEZ’s net debt-to-Ebitda ratio is well within the guided range of 3-3.5x and its gearing ratio is less than one.
For the third quarter that ended in December 2022, Adani Ports reported a 12.94 percent decline in consolidated profit to Rs 1,336.51 crore on February 7.
According to a regulatory filing, the largest integrated logistics provider in the nation recorded a consolidated profit of Rs. 1,535.28 crores in the previous year.
From Rs 4,713.37 crore in the same quarter a year prior, its total consolidated income increased to Rs 5,051.17 crore in the December 2022 quarter.
In comparison to the same period a year prior, the company’s total expenses increased to Rs 3,507.18 crore from Rs 2,924.30 crore.
According to reports on average brokerage firm projections, revenue increased by 25% year over year to Rs 4,753 crore, and net profit was projected to rise by 11.8% to Rs 1,647.1 crore.
The company has completed the transactions with Haifa Port, IOTL, ICD Tumb, Ocean Sparkle, and Gangavaram Port, according to Karan Adani, and the transition to a transport utility is going well.
In a statement, the company stated that in the first nine months of the current fiscal year, it handled 252.9 MMT (million metric tonnes) of cargo.
“Performance has exceeded expectations for several debt covenants. We have a perfect history of repaying our debts on time, and thanks to internal accruals, we can easily meet the debt repayment schedule for any given financial year “said Karan Adani.
The company claimed that at mature ports with higher capacity utilization and given the focus on efficiency, its return on capital employed (RoCE) was continuously improving.
It also stated that RoCE for the logistics sector increased significantly from FY22. The ROCE at ports acquired in the last few years will reach 20% as operations ramp up, it was added.
One of the biggest market cap losses in history has been experienced by Gautam Adani’s conglomerate since the release of the Hindenburg report on January 24. This amounts to almost 50 percent of the group’s total market value.
Lastly, some ways by which Big companies typically repay loans in few different ways:
Repayment of principal: Companies repay the principal amount borrowed over time, usually in regular installments. The amount of each installment is typically determined by the loan agreement.
Interest payments: Companies also make periodic interest payments on the loan, which compensates the lender for the use of their money. Interest payments can be made on a monthly, quarterly, or annual basis, as agreed upon in the loan agreement.
Prepayment: Some companies may choose to prepay their loans, which means paying off the loan in full before the end of the loan term. This can be beneficial for companies that have the funds available and want to save on future interest payments.
Refinancing: Some companies may choose to refinance their loans, which means taking out a new loan to pay off the original loan. This can be beneficial if a company can obtain a lower interest rate or more favorable terms on the new loan.
The method a company uses to repay a loan will depend on various factors, including its financial position, the terms of the loan agreement, and the company’s future financial goals.
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