The fourth richest man in the world, billionaire Gautam Adani, has recently joined the cement, airport, and data centre industries. CreditSights, a Fitch Ratings organisation, is being “cautiously alert” due to the group's aggressive objectives, the majority of which have been fueled by debt.
Fitch stated that the majority of Adani Group's ambition for expansion is debt funded across both existing and future companies in a study titled “Adani Group: Deeply Overleveraged.” The worst-case scenario, according to the research, involves excessively ambitious debt-funded expansion plans that might ultimately spiral into a major debt trap and could result in a distressed position or default of one or more group firms.
On the two Adani Group firms covered under its coverage, Adani Green Energy and Adani Ports and SEZ, it has kept the “Market perform” recommendations. The Adani company just paid $10.5 billion to purchase the cement businesses of Holcim, making it overnight the second-largest cement operator. It most recently paid $1.18 billion to acquire Israel's Haifa port.
In addition to investing in green hydrogen, airports, highways, alumina, copper refining, data centres, and expanding its coal and PVC businesses, Adani group wants to boost its renewable portfolio by five times.