Adani Portfolio of companies ‘most attractive’ among India corporates

According to Japanese brokerage Nomura, other Indian corporates stay at 'expensive levels' compared to Adani Group companies

Mumbai: The Adani Portfolio of companies appear “most attractive” among Indian corporates, according to Japanese brokerage Nomura, as other Indian corporates stay at ‘expensive levels’ compared to the Group companies.

In a new report, the global brokerage said that the ports-to-power conglomerate will also be able to withstand recent turmoil brought on by allegations in an indictment by the US Department of Justice (DoJ). “Adani complex looks most attractive among other IG (investment grade) corporates from India. Other Indian IG corporates stay at expensive levels vis a vis Adani complex,” the note read.

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Nomura further commented that compared with the Adani-Hindenburg episode in early 2023, “Adani Group’s liquidity management awareness has improved meaningfully and should be able to weather the rainstorm with adequate short-term liquidity position.”

Nomura added that overall, no signs of stress are seen across the Adani Group and its fundamentals/asset quality remain intact. “We believe the group should be able to weather this round of rainstorm,” said the financial research firm. As far as global banks halting their financial support to Adani companies is concerned, Nomura expects that it will not be a problem when the matter regarding DoJ allegations settles down.

“Separately, the big three Japanese banks plan to continue their relationship with Adani group.” The DoJ indictment is only an allegation, Nomura said, citing Adani Management. The allegation does not constitute any breach in anti-corruption covenants. It could indicate a breach if found guilty. Nomura did caution that “global banks might halt new financings in the short-term but should gradually resume in the long-term when the dust of the Adani-DoJ saga settles.”

“Separately, the Big Three Japanese banks plan to continue their relationship with Adani Group,” it added. The Big Three Japanese banks refer to MUFG, SMBC and Mizuho. Nomura expects upside on bond prices for Adani Green Energy Ltd., Adani Ports and Special Economic Zone Ltd., Adani International Container Terminal, Adani Electricity Mumbai Ltd., Adani T-One Transmission Ltd., and Adani Renewable Energy Ltd. For Adani Green Energy, the prices may go up to 7 points, for others it sees 2 to 4 points, said the report.