Information Replace 6 for 2023: A Get up name for the Indebted?

Debt’s place in enterprise

    To know debt’s function in a enterprise, I’ll begin with an enormous image perspective, the place you break a enterprise down into assets-in-place, i.e., the worth of investments it has already made and progress property, the worth of investments you anticipate it to make sooner or later. To fund the enterprise, you’ll be able to both use borrowed cash (debt) or proprietor’s funds (fairness), and whereas each are sources of capital, they symbolize totally different claims on the enterprise. Debt gives contractual claims, within the type on curiosity funds and principal repayments, whereas fairness is a residual declare, i.e., you obtain no matter money flows, if any, which might be left over after different declare holders have been paid:

Good Causes for Borrowing

    What are the pluses and minuses of borrowing, when you take a clear-eyed take a look at it simply as a capital supply? First, borrowing cash can’t alter the working danger in a enterprise, which comes from the property that it holds, both in-place or as progress investments, however it would have an effect on the danger to fairness traders in that enterprise, by making their residual declare (earnings) extra unstable, As well as, the contractual declare that comes with debt can create truncation danger, as a result of failing to make curiosity or principal funds can lead to chapter, and efficient lack of fairness. Second, borrowing cash at a decrease fee, by itself, can’t alter your general value of funding, since that value is set by the danger of your property. Therefore, the advantages of borrowing at a decrease fee will at all times be offset by a better value for fairness traders, leaving the price of funding unchanged, except a finger is placed on the dimensions, giving one supply particular advantages. In a lot of the world, governments have written tax codes that do precisely this, by making curiosity funds on debt tax-deductible, whereas requiring that money flows to fairness be made out of after-tax money flows. That tax advantage of debt will enhance with the marginal tax fee, making it far more helpful to borrow in international locations with excessive tax charges (Germany, Japan, US) over these with decrease tax charges (Eire, a lot of Japanese Europe). The chart beneath lists the tax advantages as the first advantage of borrowing and the anticipated chapter value as the first draw back of debt:

There are additionally ancillary advantages and prices that the chart notes, with debt working as a disciplinary instrument in some companies, when managers contemplate taking new tasks, since unhealthy tasks can plunge the agency out of business (and trigger managers to lose their jobs), and the problem of managing the conflicting pursuits of fairness traders and lenders, that manifest in covenants, restrictions, and authorized prices.

Unhealthy Causes for Borrowing

On the opposite facet of the ledger, there are some corporations that refuse to borrow cash for unhealthy causes as nicely. The primary is that borrowing cash will decrease internet earnings, as curiosity bills get deducted from working earnings, however that decrease internet earnings shall be accompanied by much less fairness invested within the agency, typically resulting in larger earnings per share, albeit with larger volatility. The second is that borrowing cash will enhance perceived default danger, and if the corporate is rated, decrease scores, and that too is true, however borrowing cash at a BBB ranking, with the tax profit included, would possibly nonetheless yield a decrease value of funding that staying at a AA ranking, with no debt in use.

The “Proper” Financing Combine

     Is there an optimum mixture of debt and fairness for a enterprise? The reply is sure, although the payoff, when it comes to worth, from transferring to that optimum could also be so small that it’s typically higher to carry again from borrowing. On this part, I’ll lay out a mechanism for evaluating the results of borrowing on the price of funding a enterprise, i.e., the price of capital, and discuss why companies could beneath or overshoot this optimum.

An Optimizing Device

   In my second and third information posts for this yr, I chronicled the results of rising rates of interest and danger premiums on prices of fairness and capital. In computing the latter, I used the present debt ratios for companies, however made no try to judge whether or not these mixes have been “proper” or not. That mentioned, the price of capital can be utilized as an optimizing instrument in assessing the correct mix of debt and fairness, with the optimum combine being the one which yields the bottom value of capital. That computation, although, is a dynamic one, since each the price of fairness and the price of debt will change as a enterprise modifications its debt ratio:

In impact, you’re buying and selling off the advantages of changing costlier fairness with lower-rate debt towards the ensuing larger prices of fairness and debt, while you borrow extra. As you’ll be able to see, the online impact of elevating the debt ratio on the price of capital will rely upon the place a agency stands, relative to its optimum, with beneath levered companies seeing prices of capital lower, as debt ratio will increase, and over levered companies seeing the other impact. 

As to the variables that decide what that optimum debt ratio is for a agency, and why the optimum debt ratio can vary from 0% for some companies to shut to 90% for others, they’re easy and intuitive:

1. Marginal tax fee: If the first advantage of borrowing is a tax profit, the upper the marginal tax fee, the upper its optimum debt ratio. In truth, at a zero % tax fee, the optimum debt ratio, when you outline it as the combo that minimizes value of capital is zero. The image beneath captures variations in company marginal tax charges, getting into 2023, the world over:
   

   Obtain marginal tax charges, by nation

    As you’ll be able to see from the warmth map and desk, most international locations have converged round a tax fee of 25%, with just a few outliers in Japanese Europe and components of Center East having marginal tax charges of 15% or decrease, and some outliers, together with Australia, India and components of Africa with marginal tax charges that exceed 30%. Of those international locations, Australia does provide safety from double taxation for fairness traders, successfully endowing fairness with some tax advantages as nicely, and decreasing the marginal tax advantages from including debt.

2. Money producing capability: Debt funds are serviced with working money flows, and the extra working money flows that companies generate, as a % of their market worth, the extra that they’ll afford to borrow. One simplistic proxy for this money producing capability is EBITDA as a % of enterprise worth (EV), with larger (decrease) values indicating higher (lesser) money stream producing capability. In truth, which will clarify why companies that commerce at low EV to EBITDA multiples usually tend to change into targets in leveraged buyouts (LBOs) or leveraged recapitalizations..
3. Enterprise danger: Not surprisingly, for any given stage of money flows and marginal tax fee, riskier companies shall be able to carrying much less debt than safer companies. That danger can come from many sources, some associated to the agency (younger, evolving enterprise mannequin, extremely discretionary merchandise/providers), some to the sector (cyclical, commodity) and a few to the general financial system (unstable). The corporate-specific elements present up within the danger parameters that you just use for the agency (beta, ranking) and the macro and market-wide elements present up within the macro inputs (riskfree charges, fairness danger premiums)

In case you are involved in checking how this optimization works, obtain this spreadsheet, and take a look at altering the inputs to see the impact on the optimum. I seemed Adani Enterprises, the holding firm for the Adani Group and estimated the price of capital and estimated worth at totally different debt ratios: 

In my evaluation, Adani Enterprise carries an excessive amount of debt, with precise debt of 413,443 million greater than double its optimum debt of 185,309 million, and decreasing its debt load is not going to simply decrease its danger of failure, but additionally decrease its value of capital. This firm is a part of a household group, the place larger debt at one of many Adani corporations could also be offset by much less debt at one other. To take care of this cross subsidization, I aggregated numbers throughout all seven publicly traded Adani corporations and estimated the optimum debt combine, relative to the mixed enterprise values:

The Adani Group collectively carries about 3 times as a lot debt because it ought to, confirming that the group is over levered as nicely, however word that that is unhealthy enterprise apply, not a con. In truth, as you’ll be able to see from the price of capital graph, there may be little, if any, profit when it comes to worth added to Adani from utilizing debt, and important draw back danger, except the debt is being sponsored by somebody (authorities, sloppy bankers, inexperienced bondholders).

    You probably have taken a company finance class someday in your previous life are most likely questioning how this strategy reconciles with the Miller-Modigliani theorem, a key part of most company finance courses, which posits that there isn’t any optimum debt ratio, and that the debt combine doesn’t have an effect on the worth of a enterprise. That theorem deserves the credit score that it will get for establishing the framework that we use to evaluate debt at present, however it additionally makes two key assumptions, with the first being that there are not any taxes and the second being that there isn’t any default. Eradicating debt’s greatest profit and value from the equation successfully negates its impact on worth. Altering your debt ratio, within the Miller-Modigliani world, will depart your value of capital unchanged. In the true world, although, the place each taxes and default exist, there’s a “proper” combine (albeit an approximate one) of debt and fairness, and corporations can borrow an excessive amount of or too little.

Impact on worth

    Should you can see the mechanics of how altering debt ratio modifications the price of capital, however are unclear on how decreasing the price of capital modifications the worth of a enterprise, the hyperlink is a straightforward one. The intrinsic worth of a enterprise is the current worth of its anticipated free money flows to the agency, computed after taxes however earlier than debt funds, discounted again at its value of capital:

As you borrow extra, your free money flows to the agency ought to stay unaffected, most often, since they’re pre-debt money flows, and a decrease value of capital will translate into a better worth, with one caveat. As you borrow extra and the danger of failure/chapter will increase, there may be the likelihood that clients could cease shopping for your merchandise, suppliers could demand money and your staff could begin abandoning ship, making a demise spiral, the place working earnings and money flows are affected, in what’s termed “oblique chapter prices”. In that case, the optimum debt ratio for an organization is the one which maximizes worth, not essentially the one at which the price of capital is minimized.

Do corporations optimize financing combine?

        Do corporations contemplate the commerce off between tax advantages and chapter prices when borrowing cash? Moreover, do they optimize they debt ratios to ship the bottom hurdle charges. The reply could also be sure for just a few companies, however for a lot of, debt coverage is pushed by elements which have little to do with worth and extra with softer elements:

1. Inertia: For my part, at most corporations the important thing determinant of debt coverage, as it’s of most different facets of company finance, is inertia. In different phrases, corporations proceed the debt insurance policies that they’ve used prior to now, on the mistaken view that if it labored then, it ought to work now, ignoring modifications within the enterprise and within the macro financial system. That, as an illustration, is the one option to clarify why older telecom corporations, which developed a apply of borrowing giant quantities throughout their time as monopoly telephone companies, proceed that apply, at the same time as their enterprise have advanced into intensely aggressive, know-how companies. 
2. Me-to-ism: The second and nearly as highly effective a drive in figuring out debt coverage is peer group habits. Staying with the telecom agency theme, newer telecom corporations getting into the house really feel the urge to borrow in giant portions, as a result of different telecom corporations borrow. It is for that reason that debt coverage is much extra more likely to range throughout business teams than it’s to range inside an business group.
3. As a result of lenders are keen to lend me cash: There’s a ultimate perspective on debt that may lead corporations to borrow cash, even when that borrowing is inimical to their very own nicely being, and it’s that if lenders provide them the cash, you can not flip them away. In truth, it’s the excuse that actual property builders use after each increase and bust cycle to elucidate away why they selected to borrow as a lot as they did. The “lenders made me do it” excuse for borrowing cash is about as unhealthy because the “the buffet lunch made me overeat” excuse utilized by dieters, and it simply as futile, as a result of in the end, the injury is self inflicted.
4. Management: In my submit on the Adani Group, I famous that of their zeal for management, insiders, founders and households typically make dysfunctional selections, and a type of is on borrowing. A rising agency wants capital to fund its progress, and that capital has to come back from fairness issuances or new borrowing. When management turning into the dominant prerogative for these working the agency, they might select to borrow cash, even when it pushes up the price of funding and will increase truncation danger, relatively than difficulty shares to the the general public (and danger dilution their management of the agency). 

Measuring Debt Hundreds

    With the lengthy lead in on the commerce off that animates the borrowing resolution, allow us to speak about how you can measure the debt load at an organization. Whereas the reply could appear apparent to you, it’s not to me, and I’ll begin by taking a look at debt scaled to capital, a measure of debt’s place within the financing combine, after which take a look at debt scaled to money flows or earnings, typically a greater measure of potential default danger.

Debt to Capital Ratios

    Within the monetary steadiness sheet that I used initially of this submit, I famous that there are two methods of elevating capital to fund a enterprise, debt, with its contractual claims on money flows, or fairness, with its residual claims. Following up, it does make sense to take a look at the proportions of every {that a} agency makes use of in funding and that may be measured by taking a look at debt, as a % of capital within the agency. That mentioned, there are (at the very least) 4 variants that you will note in apply, relying on the composition of whole debt, and whether or not capital is obtained from an accounting steadiness sheet (e book worth) or a monetary steadiness sheet (market worth):

1. Gross versus Internet Debt: The gross debt is the entire debt owed by a agency, lengthy and brief time period, whereas the online debt is estimated by netting out money and marketable securities from the entire debt. Whereas there may be nothing inherently that makes one measure superior to the opposite, it is very important do not forget that gross debt can by no means be lower than zero, however internet debt can, for companies which have money balances that exceed their debt.
2. Ebook versus Market: The e book debt ratio is constructed round utilizing the accounting measure of fairness, normally shareholder’s fairness, as the worth of fairness. The market debt ratio, in distinction, makes use of the market’s estimate of the worth of fairness, i.e., its market capitalization, as the worth of fairness. Whereas accountants, CFOs and bankers are keen on the e book worth measure, nearly the whole lot in company finance revolves round market worth weights, together with the debt to fairness ratios we use to regulate betas and prices of fairness and the debt to capital ratios utilized in computing the price of capital.

There are sub-variants, inside these 4 variants, with debates about whether or not to make use of solely long-term debt or all debt and about whether or not lease debt ought to be handled as debt. My recommendation is that you just contemplate all interest-bearing debt is debt, and that selecting and selecting what to incorporate is an train in futility. 

    I computed gross and internet debt ratios for all publicly traded, non-financial service companies, initially of 2023, relative to each e book and market worth, with the distribution of debt ratios initially of 2023 beneath:

You probably have been fed a gentle weight loss program of tales of rising indebtedness and profligate corporations, you can be stunned by the outcomes. The median debt ratio, outlined each in e book and market phrases, for a worldwide agency initially of 2023 was between 10% and 20% of general capital. It’s true that there are variations throughout areas, as you’ll be able to see within the desk beneath, which computes the debt ratios primarily based upon aggregated debt and fairness throughout all companies and is thus nearer to a weighted common. On a e book debt ratio foundation, america, as a area, has the very best debt ratio on the earth, however on a market debt ratio foundation, Latin America and Canada have the very best debt masses.
    The issue with utilizing debt to capital ratios to make judgments on whether or not companies are carrying an excessive amount of, or too little, debt is that, on the danger of stating the apparent, you can not make curiosity funds or repay debt utilizing capital, e book or market. Put merely, you’ll be able to have a agency with a excessive debt to capital ratio with low default danger, simply as you’ll be able to have a agency with low debt to capital with excessive default danger. It’s one cause {that a} banking concentrate on whole property and market worth, when lending to a agency, can result in dysfunctional lending and troubled banks. To the retort from some bankers that you could liquidate the property and get well your loans, I’ve two responses. First, assuming that e book worth is the same as liquidation worth could let bankers sleep higher at evening, however it may be delusional in industries the place they’re no prepared consumers for these property. Second, even when liquidation is an choice, a banker who depends on liquidating property to gather on loans has already misplaced on the lending sport, the place the target is to gather curiosity and principal on loans, whereas minimizing defaults and liquidations.

Debt to EBITDA, Curiosity Protection Ratios

    If debt to capital shouldn’t be a superb measure for judging over or beneath leverage, what’s? The reply lies in taking a look at an organization’s earnings and money stream capability, relative to its debt obligations. The curiosity protection ratio is the primary of two ratios that I’ll use to measure this capability:

Curiosity Protection Ratio = Earnings earlier than curiosity and taxes/ Curiosity bills

As a lender, larger curiosity protection ratios point out a much bigger buffer and thus extra security, different issues remaining equal, than decrease curiosity protection ratios. Whereas the curiosity protection ratio is a extensively used proxy for default danger, and the one ratio that finest explains variations in bond scores for a agency, its restrict is its concentrate on curiosity bills, to the exclusion of debt principal funds that could be coming due. The second ratio treatments this downside by taking a look at debt as a a number of of EBITDA:

Debt to EBITDA = Complete Debt/ EBITDA

The logic behind this measure is easy. The denominator is a measure of working money flows, previous to an entire host of money outflows, however a agency that borrows an excessive amount of relative to EBITDA is stretching its capability to repay that debt. 

    I compute each ratios (curiosity protection and Debt to EBITDA) for all publicly traded companies and the outcomes are graphed beneath, with the essential caveat that they transfer in opposing instructions, when measuring security, with safer companies having larger curiosity protection rations and decrease Debt to EBITDA multiples;

Not solely do curiosity protection ratios and debt to EBITDA multiples range extensively throughout companies, however in addition they range throughout sectors. On a pure numbers-basis, utilities appear like they’re probably the most harmful companies to lend to, with skintight curiosity protection ratios (1.17, within the combination) and sky excessive whole debt to EBITDA, however that may be deceptive since many of those utilities are monopolies with predictable earnings streams and the capability to go curiosity prices all the way down to their clients. On the different finish of the spectrum, know-how and vitality corporations look the most secure on an curiosity protection ratio foundation, however with each teams, you are worried about year-to-year volatility in earnings. 

    To get a more in-depth take a look at distinction throughout corporations, I seemed on the 94 business teams that I break down corporations into, and take a look at probably the most extremely levered (with whole debt to EBITDA as my main sorting proxy, however reporting my different debt load measures) and least extremely levered business teams, taking a look at simply US publicly traded corporations:

Obtain all business group information

Actual property and actual estate-based enterprise dominate he most levered business teams, with utilities, auto and airports rounding out the record, reflecting their historical past in addition to the willingness of bankers to lend on tangible property. Expertise and commodity business teams proliferate on the least levered record, reflecting the upper uncertainty about future earnngs and banking unease with lending towards intangibles. (at the very least with know-how corporations).

The Default Query

    The largest draw back of debt is that it will increase publicity to default danger, and because the final a part of this evaluation, I’ll take a look at default charges over time, culminating in 2022, after which sit up for the challenges that corporations will face in 2023 and past.

Enterprise Default: The what and the why

    In precept, any firm that fails to fulfill a contractual dedication is in default, at the very least on that dedication, however there may be extensive hole between that act and authorized default, the place there may be an official declaration of chapter, and courts step in. Moreover, there’s a hole between authorized default and liquidation, the place the property of a agency are liquidated to repay collectors. There are various companies that default on contractual obligations, however discover methods to evade declaring chapter, and amongst companies that declare chapter, a major subset restructure and keep in operations. If there weren’t the case, there would most likely be a handful of airways nonetheless in operations for the reason that relaxation would have been liquidated years and even a long time in the past. 

    It doesn’t matter what definition of default you adhere to, it arises from a easy mathematical assemble, which is {that a} agency doesn’t have the money flows to service its debt funds, however that may happen both as a result of money flows drop off or as a result of debt funds soar. Default, as a consequence, can broadly be traced to 4 elements:

1. Firm-specific troubles: A deterioration in an organization’s working enterprise, both due to aggressive pressures or the corporate’s personal errors, may cause working money flows to drop, placing a once-healthy firm vulnerable to default. In some circumstances, the shock to the corporate’s earnings and money flows can come from the lack of a lawsuit (giving rise to giant new commitments), a regulatory high quality or different surprising money outflow. 
2. Sector-wide points: If disruption is the phrase that has excited enterprise capitalists and traders the world over for a lot of this century, it comes with a darkish facet, which is that the disrupted companies can discover themselves with imploding enterprise fashions (shrinking revenues and working margins beneath stress). As a consequence, over time, these disrupted companies discover themselves increasingly more uncovered to default danger; Mattress, Tub and Past has much less debt excellent now than they did a decade in the past, however have gone from credit score worthy to bankrupt over that interval.
3. Macroeconomic shocks/changes: Some companies, particularly in commodity and cyclical business teams, have at all times been and can proceed to be uncovered to cycles that may trigger working earnings, even for the perfect run and most mature corporations, to swing wildly from interval to interval. Oil corporations, as an illustration, went from being money-losers (on an working earnings foundation) in 2020, when oil costs plunged, to among the many greatest money-makers within the enterprise world in 2022. Talking of 2020, all of us bear in mind the COVID-driven shutting down of the worldwide financial system within the first half of the yr and the havoc it wreaked on debtors and lenders, as a consequence.
4. Debt fee surges: There’s a ultimate cause for default, which a surge in debt funds arising from rising rates of interest and the refinancing of present debt at these larger charges. Put merely, an organization with a billion {dollars} in debt excellent, at a 2% rate of interest, will see its curiosity funds double, if charges double to 4%, and the debt is refinanced. Traditionally, this has been extra a problem in rising markets, the place companies borrow brief time period and charges are unstable, than in developed markets, the place a mix of longer-term debt and extra secure rates of interest has insulated companies from the worst of this phenomenon. However as I famous in my information submit on rates of interest, the final yr (2022) has been a most uncommon one, when it comes to rate of interest strikes, in developed markets.

Whereas all corporations are uncovered in a technique or one other to all of those elements, borrowing more cash (and rising contractual commitments) will enlarge the results; a extra levered oil firm shall be extra uncovered to default danger than a much less levered oil firm, holding all else fixed.

Defaults – Historic

    In my lead in to this part, I famous that defaulting on a mortgage or contractual obligation doesn’t at all times result in enterprise default or chapter, and that many bankruptcies don’t conclude in liquidations. That mentioned, although, the three information sequence (mortgage delinquencies, enterprise defaults and enterprise liquidations) do transfer collectively, with spikes in a single coinciding with spikes within the different, Within the graph beneath, I take a look at financial institution mortgage delinquencs in america and default charges amongst speculative grade corporations over time:

Sources: Mortgage Delinquencies from Federal Reserve Web site (FRED) and Company Defaults from S&P

Observe that the sequence undergo cycles, with will increase in delinquencies and defaults triggered by macroeconomic or market-wide elements. Within the late Nineties, it was an financial recession that was the precipitating issue, however the final three will increase in delinquencies have had their origins in different forces. The rise in delinquencies within the early a part of the 2000s began with the dot-com bust and made worse by the 9/11 assault, and subsequent financial weak spot. The 2008 market disaster had probably the most damaging and most lasting impact on defaults, partly as a result of it originated with banks, and partly due to the long run injury it did to housing costs and the financial system. The 2020 enhance in default fee was triggered by the COVID shutdown, however was not solely milder, but additionally handed rapidly, with giant bailout packages from the federal government being the distinction.

     2022, probably the most hanging side of the time sequence is that there’s nearly no discernible change in delinquencies or defaults within the yr, with each remaining on the low charges that now we have seen for a lot of the last decade. It’s true that within the final half of the yr, there have been indicators of hassle, with an uptick in delinquencies and a rise within the variety of company defaults. Since rates of interest rose throughout the yr, the absence of an impact on defaults could shock you, however there are two issues to bear in mind. The primary is that rising rates of interest normally have a lagged impact on defaults, since it’s only as corporations refinance that they face the upper prices. The second is that the US financial system stayed sturdy by means of 2022, however headwinds, and company earnings stayed resilient. 

Rankings Actions and The 12 months Forward

    If defaults measure the lack of corporations to fulfill their contractual obligations, the actions taken by scores businesses to vary the bond scores of the businesses that they fee can function as a number one indicator of anticipated defaults sooner or later. Put merely, scores businesses usually tend to downgrade corporations, in the event that they foresee a possible uptick in defaults, and improve them, in the event that they anticipate defaults to say no. Whereas the precise defaults in 2022 remained low, it’s clear that scores businesses have been turning into extra involved concerning the future, as could be seen within the variety of scores downgrades within the later components of 2022, relative to upgrades:

S&P Default and Misery, Feb 2023

Observe once more that the downgrades in 2022 are nowhere close to the downgrades that you just noticed in 2008, throughout the banking disaster, and one cause was that rising curiosity funds however, the financial system stayed sturdy throughout the yr.

    Looking forward to 2023, scores businesses are forecasting rising default charges, maybe as a result of they see an financial slowdown coming. As with my forecasts for the S&P 500 and rates of interest, you see a well-known duo of macroeconomic forces driving default danger:

Not surprisingly, a mix of excessive inflation and a steep recession will create probably the most defaults, because the vice of decrease earnings and better rates of interest will ensnare extra companies. On the different finish of the spectrum, a swift drop off in inflation with no recession will create probably the most benign setting for lenders, permitting default to stay low. 

A Wrap

    In each our private and enterprise lives, there are good causes for borrowing cash and unhealthy ones. In any case, the politicians who lecture companies about borrowing an excessive amount of are additionally those who write the tax code that tilts the enjoying discipline in the direction of debt, and by bailing out companies or people that get into hassle by borrowing an excessive amount of, they cut back its risks. That mentioned, there may be little proof to again up the proposition {that a} decade of low rates of interest has led corporations collectively to borrow an excessive amount of, however there are some that actually have examined the bounds of their borrowing capability. For these companies, the approaching yr shall be a take a look at, as that debt will get rolled over or refinanced, and there are pathways again to monetary sanity that they’ll take. 

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Datasets

1. Debt ratios, by business groupings (US, World)
2. Delinquency charges on financial institution loans, by Quarter (US): 1985- 2022

Spreadsheets

1. Normal Capital Construction Optimizing Spreadsheet
2. Adani Enterprises: Optimum Financing Combine
3. Adani Group: Optimum Financing Mix