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Keki Mistry, vice-chairman of HDFC Ltd., is optimistic about the Adani Group's financial outlook. He believes the resolution of a recent US case will improve the group's borrowing capacity and attract more lenders.
Mistry described the situation involving the alleged sale of Iranian-origin products as "unfortunate." He noted that complex supply chains can sometimes lead companies to be inadvertently involved in such issues, similar to how unauthorized products can appear on e-commerce platforms before being removed.
Borrowing Costs Expected to Fall
Speaking to NDTV Profit, Mistry stated that with the US Securities and Exchange Commission (SEC) matter now resolved, the Adani Group's borrowing costs should decrease. He anticipates a wider range of banks will be willing to offer credit, which will help the conglomerate further support India's economic expansion.
Mistry highlighted the Adani Group's strong credit ratings within India and its substantial investment plans, which are expected to drive significant infrastructure development. The group intends to invest nearly Rs 6 lakh crore across aviation, digital infrastructure, and renewable energy sectors.
Renewable Energy's Role
Mistry pointed to renewable energy as a potential key to India's economic success, especially if scaled up quickly amid current high energy prices. He also suggested that crude oil prices are unlikely to drop back to $60 per barrel soon, underscoring the need for domestic renewable energy solutions.
Adani's Infrastructure Impact
Mistry emphasized the Adani Group's significant role in India's infrastructure. He noted that the group accounts for 14% of the Nifty 50's capital expenditure and contributes about 9% to India's infrastructure GDP. Mundra Port, a major Adani facility, handles approximately 28% of India's total port cargo and serves as the country's largest automobile export hub, with trade links to nearly 100 nations.
The group's financial contributions are substantial, with Mistry stating they pay around Rs 75,000 crore annually in taxes and government dues. This positions the Adani Group as a key player in driving India's growth through infrastructure development.