Adani Group Bags Rs 60,000 Crore Funding Boost From Indian Banks For Infra Projects; Report

The Adani Group has successfully secured Rs 60,000 crore in financing from a consortium of Indian public and private sector banks led by the State Bank of India. The funds are earmarked for a range of significant infrastructure projects, including green hydrogen, a copper smelter unit, power, transmission, and road initiatives, spread over the next five years, said BusinessLine sources.

The consortium comprises five Public Sector Banks (PSBs) and three prominent private sector banks, creating a diverse financial backing for the Adani Group's plans. Approximately 56% of the total funds will be sourced from state-owned banks, with the remainder coming from private lenders. Two finance institutions specializing in the power sector are also part of this financial collaboration. The funds are being raised at interest rates ranging from 9% to 11%.

A significant portion of the financing will be directed towards the green hydrogen project, with the first phase expected to boast a capacity of 1 million tonnes by FY27. A substantial sum of Rs 24,000 crore has been allocated to establish a robust green hydrogen ecosystem. The plan involves an investment of approximately $50 billion over the next decade, aiming to produce 3 million tonnes of hydrogen.

Additionally, Rs 10,000 crore will be invested in road projects to expand the footprint in the transport and logistics sector. An allocation of Rs 8,000 crore has been earmarked for a $1.2-billion copper project, set to commence operations next month with a capacity of 5 lakh tonnes. The Adani Group aims to solidify its position among the top three players in the road business by 2025, leveraging its 5,000-lane km road network.

This financing deal marks a significant shift for the Adani Group, as it comes on the back of allegations of fraud and misgovernance by Hindenburg Research in January last year. Traditionally relying on international banks and overseas bond markets for funding, this move indicates a strong show of support from Indian banks. Of the group's outstanding debt of Rs 2.65-lakh crore, less than a third is owed to Indian lenders.

Apart from the green hydrogen and road projects, the remaining funds will be strategically utilized for power and transmission assets. Additionally, an investment will go into a 2-million-tonne coal-to-PVC project in Mundra, with the first phase expected to be commissioned in FY26. This aligns with the group's broader vision, as outlined by group CFO Jugeshinder Singh last year, intending to spend around $84 billion over the next decade, said BusinessLine sources.

While a portion of the funds has already been secured, the finalization is expected to be completed by May. The funds will be deployed over a period of 3-5 years, reflecting a carefully planned and phased approach to execute the diverse range of infrastructure projects.

Despite attempts to seek clarification on the financing from the State Bank of India, there has been no response. This lack of communication adds an element of mystery to the financing deal, leaving room for speculation on the intricacies and terms involved.

The Adani Group's successful securing of Rs 60,000 crore from Indian banks for its major infrastructure projects signifies a notable shift in its funding strategy. This financial injection not only bolsters the group's plans but also reflects a renewed confidence from domestic financial institutions.

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