India's Adani Group 'deeply overleveraged', CreditSights says

India's Adani Group 'deeply overleveraged', CreditSights says

NEW DELHI, Aug 23 (Reuters) - India's Adani Group, controlled by billionaire Gautam Adani, is "deeply overleveraged" and its many investments in capital-intensive businesses could pose long-term risks to investors, Fitch Group's debt research unit CreditSights said on Tuesday.

The conglomerate's debt-funded growth plans could spiral "into a massive debt trap" and culminate in distress or default of its companies and the broader Indian economy in a "worst-case scenario", CreditSights said.

An Adani Group spokesman did not immediately respond to a request seeking comment.

The grim assessment of the conglomerate, controlled by Asia's richest man, comes at a time its group companies are investing in new sectors such as telecom, cement and long-term infrastructure projects.

The heavy debt of the companies pose a risk at a time when interest rates are high and due to the long gestation period of some of the infrastructure projects, CreditSights said in its report.

CreditSights also flagged "high key-man risk", saying the capability of senior management in Gautam Adani's absence may be inadequate.

Shares in Adani Group companies including flagship Adani Enterprises ADEL.NS , Adani Green Energy ADNA.NS , Adani Ports APSE.NS and Adani Power ADAN.NS fell after the release of the report, which pegged the conglomerate's total debt at 2.3 trillion rupees ($28.80 billion).

Shares of Adani Green, up about 170% over the year, led the slide falling as much 6.9%. Adani Power, which has risen more than five-fold in the last year, fell 5% to hit the lower circuit- the limit a stock price can move on a single day.

($1 = 79.8550 Indian rupees)
Reporting by Manoj Kumar; editing by Jason Neely