India’s largest green energy company, Adani Green Energy (AGEL), has decided to review its capital expenditure (capex) plan of ₹10,000 crore for the financial year 2023-24 (FY24), market daily Business Standard reported. In a post-third quarter results call with its bond holders, AGEL’s management said this was a tentative target and was still under review.
Last week, addressing the earnings call, the AGEL management had said it has planned a capex of “broadly” ₹10,000 crore for FY24 and a similar amount for FY25, noted the report.
“Short-term capex (12-18 months) is being reviewed. In the near term, there will be a slowdown in our target. We will revisit our discretionary capex and reduce our capex in the near term,” the management said in the call with fixed-income investors on February 16. Business Standard has reviewed the audio of the meeting.
BS pointed out that this is the second such move by an Adani Group company since US-based short-seller Hindenburg Research released a report accusing the company of stock manipulation and accounting fraud, charges that the group has denied.
Last week, Adani Power called off the acquisition of DB Power close to a year after winning the bid. Adani Road Transport has also put investment commitments in new road projects on hold, it added.
On the February 16 call, BS informed that AGEL executives told bondholders that the capex for FY24 was a combination of committed and discretionary spends. “The capex number that is being talked about is still under review. A larger part of this capacity can be in the form of discretionary capex,” said the company.
The development comes close on the heels of rating agency Moody’s changing its outlook to negative because of the company’s “large capital spending program and dependence on sponsor support potentially in the form of subordinated debt or shareholder loans,” which it said is likely to be less certain in the current environment, the report pointed out.