Adani Group’s cost of capital falls 104 basis points in FY25 amid credit upgrades

In a recent investor meeting, Adani officials said this reduction in borrowing costs comes as a result of multiple credit rating upgrades, a more stable earnings profile, and a resilient business model that has withstood external volatility.

Last month, CRISIL had upgraded Adani Power’s rating to ‘AA’ and revised Adani Green’s outlook to ‘Positive’ from ‘Stable’.

For a capital-intensive business like infrastructure, even a 50 basis point reduction in borrowing costs can lower the total cost of a 20-year project by 10-15%, the company said in a presentation to investors.

The group’s run-rate EBITDA has surged nearly fourfold — from Rs 25,389 crore in FY19 to Rs 91,693 crore for Dec’24 TTM (Trailing Twelve Months). Additionally, 75% of its profits now come from assets rated ‘AA-’ and above, up from just 48% in FY19. This strong earnings base further reduces credit risk, making debt financing more attractive.

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Besides, Adani’s leverage is near an all-time low, with net debt to EBITDA at 2.46x, ensuring financial stability even amid aggressive expansion plans.The group has committed over $100 billion (Rs 8 lakh crore) in investments over the next decade with twelve-month EBITDA exceeding $10 billion and continuing to grow in double digits.Adani Group CFO Jugeshinder (Robbie) Singh said the conglomerate’s businesses are cash flow positive and will fund their own growth. “We don’t need any capital for our stated business plan from third parties, either debt or equity,” he said. “We have said we will invest close to $100 billion over the next 10 years. All of that capital is cash after tax that our businesses produce.”

Breaking down the group’s finances, Singh explained that if the company’s cash generation is multiplied over 10 years, it amounts to roughly $71 billion. Additionally, ongoing projects under construction will add another $41 billion over the period, with the company currently holding $6 billion in free cash reserves.

“That gives us roughly about $118 billion,” Singh said. “We have scheduled maturities over the next 10 years of debt of roughly $21 billion. So, we are left with about $97–98 billion. And we are saying we will only invest $100 billion.”

He stressed that Adani Group can meet all its debt maturities without needing to refinance and can fully execute its business plan. “Excess question only comes if we want to invest more than $100 billion, which we haven’t decided we want to,” he said. “And fundamentally, because our risk stance is such, the risk stance is mini-US—announce only what you can execute, run and fund yourself.”