'Very healthy': Gautam Adani says debt-to-EBITDA ratio has come down from 7.6 to 3.2

World's third richest person, Gautam Adani, told India Today that Adani Group has solid financials in place and that all his critics' misgivings surrounding the conglomerate's Rs 2 lakh crore debt are misplaced.

Also read: How Gautam Adani feels about being the world's 3rd richest man

When asked by India Today Group's managing editor Raj Chengappa on what gives him confidence that he can repay the debt, Adani said: "We are financially very strong and secure. Such noises are coming from two categories. The first category is of the people who are not doing deep diving to understand the detailed nuances of debt and finances of company. I am sure if they make an effort to understand the financial statements, all the misgivings about debt will disappear. However, there is the second category of people with vested interests deliberately creating confusion and misunderstanding to tarnish the reputation of the group."

Asia's richest man said Adani Group's debt-to-EBITDA ratio has come down from 7.6 to 3.2, which is "very healthy". The debt-to-EBITDA ratio is a debt ratio that shows how many years it would take for a company to pay back its debt if net debt and EBITDA are held constant.

"The fact of the matter is that, in the past nine years, our profit has been growing at twice the rate of our debt, because of which our debt-to-EBITDA ratio has come down from 7.6 to 3.2, which is very healthy for a large group where most of the companies are in the infrastructure space with assured and predictable cash flow unlike in manufacturing. It is for this reason that not only national but international rating agencies have rated us equivalent to India’s sovereign rating," said the Adani Group Chairman.

Adani added that it is a matter of great pride for him that "no other business group in India has as many companies as the Adani Group, which has sovereign ratings".

"It is a matter of great pride for me that no other business group in India has as many companies as the Adani Group which has sovereign ratings. Everyone is well aware that rating agencies, particularly the international ones, are very conservative and stingy in giving ratings and they have a very rigorous and robust system and process of financial analysis," he underscored.

He said that it's only because of all these reasons, Adani Group could close the $10.5-billion deal for ACC and Ambuja in mere three months.   "It is for these fundamental financial strengths of our group that we were able to close the ACC and Ambuja deal of $10.5 billion in a record time of just three months," said Adani.