Adani Group is in talks with banks to raise nearly $750 million or `6,200 crore to pay for the conversion of warrants allotted by Ambuja Cements. The deadline to make the payment ends on April 18.
Ambuja Cements had allotted 477.4 million convertible warrants to Harmonia Trade and Investment, a part of the Adani family, in October 2022. The Adani family had made an upfront payment of `5,000 crore while the remaining `15,000 crore was to be paid within the next 18 months. Of this, the family has paid `6,661 crore in March this year.
“For the payment of the second tranche, which is due before April 18, Adani Group needs around $1 billion. Of this, around $200-250 million has been tied up with some banks. They are approaching banks for the remaining $750 million,” said a source.
Of the 477.4 million warrants issued, the company needs to convert around 265.5 million by April 18. After the conversion of warrants to shares, the promoters’ shareholding will rise from 66.7% as of March-end to 70.3%.
The Adani family is looking at a notional gain of around `9,869 crore going by the current stock price.
The warrants were issued at `418.87 per unit for `20,000 crore while the Ambuja Cements’ stock is currently trading at around `625.55 apiece, taking the total value of converted shares to `29,869 crore.
“It makes commercial sense to convert warrants to shares as stock prices have gone up substantially. So if there is any shortfall in financing, then the group is ready to put money from its pocket,” said the source.
As per bankers, Adani Group may not be able to raise the full amount from the banks. “Given the tight deadline, they may fall short of around 10-15% of total funds, the rest they seem to have arranged,” said another source.
Bankers were reluctant to share details about the pricing of the loans but said “it’s a very lucrative deal for banks. The pricing is reflective of the risk of the transaction”, said the source.