Business
Fitch unit warns Adani Group may be careering into a debt trap
BY S VENKAT NARAYAN
Our Special Correspondent
NEW DELHI, August 27: Indian billionaire Gautam Adani’s ports-to-power conglomerate is “deeply overleveraged,” with the group investing aggressively across existing as well as new businesses, predominantly funded with debt, CreditSights, a Fitch Group unit, said in a report. The aggressive expansion pursued by the Adani Group, led by Asia’s richest person, has put pressure on its credit metrics and cash flow, CreditSights said in the report Tuesday. It cautioned: “In the worst-case scenario,” it may spiral into a debt trap and possibly a default.
“We see little evidence of promoter equity capital injections into the group companies, which we feel is needed to reduce leverage in their stretched balance sheets,” the agency said. It was referring to fund infusions from the Adani Group’s founders, known as “promoters” in India.
All seven listed Adani firms declined by 2% to 7% in trading Tuesday. A representative for the Group did not immediately respond to a request for comment on the report.CreditSights’ report comes after a big few years for Adani, who’s been on a rapid diversification spree, expanding an empire centred on ports and coal mining to include airports, data centres and cement as well as green energy. The group recently pledged to plow $70 billion into renewable projects.
These moves have not only boosted Adani’s stature in India, but his fortune, with his net worth surging past $135 billion this year. He’s also increasingly moving into spheres dominated by the man he replaced as Asia’s richest man, compatriot Mukesh Ambani of Reliance Industries Ltd.
The report puts a spotlight on the multiple fault lines that may impede Adani’s ambitions and the stratospheric surge in the shares of his firms. CreditSights’ analysts, however, said they draw “comfort” from the group’s strong relationships with banks as well as the administration of Indian Prime Minister Narendra Modi.
Some other highlights from the report, authored by CreditSights’ Lakshmanan R, Rohan Kapur and Jonathan Tan are:
The Adani Group is entering new and unrelated businesses, which are highly capital intensive, raising concerns over execution oversight;
Potential strong competition between the group and Ambani’s Reliance to achieve market dominance could lead to “imprudent financial decisions;”
Adani Group is also exposed to moderate levels of governance and ESG risks
The group has a “strong track record of churning out strong and stable companies” through its flagship, Adani Enterprises Ltd., and has built a portfolio of “stable infrastructure assets tied to the healthy functioning” of the Indian economy;
Its founder “enjoys a strong relationship” with the Modi government and has benefited from “policy tailwinds;”
CreditSights remain “cautiously watchful” of the group’s growing appetite for expansion, which is largely debt-funded.
A self-made billionaire who started his business as an agri-trading firm in late 1980s, Adani has also been a busy dealmaker this year. The Adani Group acquired the Haifa port in Israel in July for $1.2 billion and Swiss firm Holcim’s Indian cement units for $10.5 billion in May, besides almost three dozen big and small acquisitions. It’s also expanding into media, health care and digital services.
The group owns India’s largest private sector port operator, coal miner, city gas distributor and airport operator and is aiming to create the world’s largest renewable power generator.
Investors have cheered the tycoon’s ability to rapidly scale up his businesses, spurring massive share rallies in Adani firms even during the pandemic, when most businesses suffered. Adani Enterprises and Adani Green Energy Ltd. have surged more than 1,300% since the beginning of 2020. Adani Total Gas Ltd. has rallied about 1,900% and Adani Transmission Ltd. over 900%, while the benchmark S&P BSE Sensex surged almost 42% over this period.
But it’s this breakneck growth that’s making credit watchers, including CreditSights, uneasy. The research firm acknowledges that the Adani founding family’s status as a majority shareholder in most of their listed group companies means they will go all out to support them.
The family’s “entire fortune and reputation is tied to the Adani Group companies,” it said. “Having such major ‘skin in the game’ could imply that the family would pull all stops to avoid default in any of the entities, since any material liquidity or solvency issue in one company would likely have a contagion effect on the valuation of the remaining companies, too.”
Business
GDP data reaffirms persistent asymmetry of Sri Lanka’s provincial economy
Western Province maintains its dominant position, accounting for 42.4% of nominal GDP
The 2024 provincial GDP data reaffirms the profound and enduring structural asymmetry in Sri Lanka’s economic geography. The Western Province continues to function as the nation’s overwhelming economic core, while the second and third runners-up, the North Western and Central Provinces respectively, operate on a markedly different scale and sectoral foundation.
The Western Province maintains its dominant position, accounting for 42.4% of the country’s nominal GDP. This preeminence is rooted in its commanding role across the high-value Services and Industry sectors, where it contributes 44.5% and 47.6% of national output, respectively. Its economy is distinctively modern, with a scant 2.3% reliance on agriculture and over 98% of its output derived from industry and services. This concentration of finance, trade, administration, and manufacturing creates an unmatched gravitational pull for investment and talent.
In stark contrast, the combined economic share of the North Western (11.5%) and Central (10.7%) Provinces is just over half that of the Western Province alone. Their paths to relevance are fundamentally different. The North Western Province has solidified its role as the nation’s agricultural heartland, contributing a full 20.0% of national agricultural activity. It also holds a significant, though secondary, position in industry at 12.0%. Its internal economic composition is more balanced across sectors than the west, with a notable reliance on industry (29.1% of its own GDP) alongside agriculture.
The Central Province, meanwhile, presents a more services-oriented profile among the runners-up, contributing 10.7% to the national services total. It also holds important shares in agriculture (13.9%) and industry (9.6%). Internally, its economy mirrors the national structure most closely among major provinces, with services constituting about 63% of its output. This suggests a diversified regional economy centered on urban hubs like Kandy, but one that lacks the concentrated high-end service power of Colombo.
The comparative analysis reveals a clear hierarchy. The Western Province is the integrated, metropolitan driver of the modern economy. The North Western Province serves as a vital agro-industrial base, and the Central Province as a diversified regional center. Despite a noted increase in the combined share of the other provinces, the gap remains vast. The economic landscape is thus characterized not by convergence, but by a persistent and specialized asymmetry, where the runners-up support the national economy through different, but essential, sectoral strengths, all while operating in the long shadow of the western province.
by Sanath Nanayakkare
Business
Sri Lanka Insurance supports 1,000 families in flood-affected areas
Sri Lanka Insurance Life and Sri Lanka Insurance General, in collaboration with the National Disaster Relief Services Centre (NDRSC), extended vital assistance to 1,000 families affected by the recent ‘Ditwah’ cyclone. The relief initiative was carried out in two phases on 30th November and 2nd December 2025, reflecting the company’s continued commitment to supporting communities in times of distress.
Dry ration packs were distributed through the NDRSC to the Maharagama Urban Council and the Divulapitiya Pradeshiya Sabha, ensuring that aid reached the most affected households swiftly and efficiently. Both distribution programmes were held with the participation of local authorities and the management teams of SLIC Life and SLIC General, further strengthening the company’s close partnership with the communities it serves.
Speaking on the initiative, Chairman of Sri Lanka Insurance, Nusith Kumaaratunga, stated; “Sri Lanka Insurance has always placed community wellbeing at the heart of its purpose. In difficult times such as these, it is our responsibility to stand with the families who have been affected and offer meaningful support. This relief effort reflects our ongoing commitment to uplift communities and reinforces our role as a trusted national insurer focused on protection, care, and compassion.”
In addition to the relief programme, Sri Lanka Insurance has implemented extended operating hours at selected SLIC General branches in the affected areas to ensure uninterrupted service. Claims, customer care teams, and branch staff are working beyond regular hours to provide prompt assistance to policyholders impacted by the severe weather conditions.
Sri Lanka Insurance remains dedicated to safeguarding its customers and supporting communities across the nation, reaffirming its longstanding promise of protection, stability, and service excellence.
Business
Jaffna Hindu College wins regional AIA Healthiest Schools award
Jaffna Hindu College was named as one of the winners at the regional award ceremony of the prestigious AIA Healthiest Schools Competition, a flagship initiative by AIA Group aimed at promoting healthier habits among students across Asia-Pacific region through innovative school-based projects. The competition, which drew a record number of entries from eight regional markets, recognises schools that implement innovative and impactful initiatives in the areas of healthy eating, active living, mental wellbeing, and sustainability. Jaffna Hindu College stood out in the Active Lifestyles Award Category for its creative and community-focused project that introduced a bicycle rental system, ensuring greater access to physical activity for all students and encouraging healthier lifestyles across the region.
The winners of AIA Healthiest Schools programme were honoured at a vibrant regional awards ceremony in Da Nang, Vietnam, where the prize money was awarded to the respective schools to support the ongoing health and wellbeing initiatives.
The Cycling Club was introduced to make physical activity accessible and enjoyable for all students. The club introduced a bicycle rental system, managed via a custom software platform, ensuring equitable access regardless of financial background. Students participated in a cycle parade and three themed challenges focused on endurance, speed, and teamwork. The initiative quickly became popular, engaging over 100 students and receiving enthusiastic support from teachers, parents, and local businesses. Experienced cyclists from the community volunteered as coaches, while cycling organisations provided safety training and route planning.
-
News21 hours agoMembers of Lankan Community in Washington D.C. donates to ‘Rebuilding Sri Lanka’ Flood Relief Fund
-
Midweek Review7 days agoHow massive Akuregoda defence complex was built with proceeds from sale of Galle Face land to Shangri-La
-
News6 days agoPope fires broadside: ‘The Holy See won’t be a silent bystander to the grave disparities, injustices, and fundamental human rights violations’
-
News6 days agoPakistan hands over 200 tonnes of humanitarian aid to Lanka
-
Business5 days agoUnlocking Sri Lanka’s hidden wealth: A $2 billion mineral opportunity awaits
-
News7 days agoBurnt elephant dies after delayed rescue; activists demand arrests
-
Editorial7 days agoColombo Port facing strategic neglect
-
News5 days agoArmy engineers set up new Nayaru emergency bridge
