Adani Green has the second-worst debt-to-equity ratio in Asia at 2,021%

25 Aug 2022 , 07:55 AM

One of the seven publicly traded subsidiaries of Gautam Adani’s ports-to-renewables empire, Adani Green Energy Ltd., has seen its debt-to-equity ratio soar to the second-highest level in Asia, raising concerns about whether the billionaire’s aggressive expansion plans have put his companies under too much debt.

Among 892 listed firms in Asia, the Gujarat-based company’s debt-to-equity ratio of 2,021% is only slightly higher than China’s Datang Huayin Electric Power Co., which has a ratio of 2,452%, according to statistics compiled by Bloomberg. By this metric, Adani Green Energy, which is taking on debt to finance the conglomerate’s $70 billion swing toward renewable energy, is the most leveraged of the businesses in the tycoon’s empire.

The startling ratio raises doubts about the tycoon’s meteoric rise and bold expansion plans. Adani has been on a diversification binge, enlarging an empire based on ports and coal mining to include data centres, cement, and renewable energy in addition to airports.

Adani’s status in India has increased as a result of these actions, and his wealth has increased as well. His net worth has reached about $135 billion, making him the richest person in Asia. However, concerns are increasing over whether the surge is sustainable; a CreditSights analysis released on Tuesday characterized the company as “seriously overleveraged,” and in the worst-case scenario, it was at risk of falling into a debt trap and defaulting.

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