Adani Group has received assurances of financial support from three Japanese banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking and Mizuho Financial Group – according to sources close to the development.
The three banks are not current lenders to the group and the support from them will include loans for new projects and refinancing of high-cost debts, as the group embarks on a series of expansion plans, the sources added. The assurances were provided at the group’s investor roadshows held across Asia and Europe to win back trust, following a January report by short-seller Hindenburg Research which led to the erosion of half the group’s market capitalisation.
The sources said existing lenders, including Standard Chartered and Barclays too have “reaffirmed” their confidence in the group’s operations.
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All banks have pledged support to refinance bonds maturing in FY24 and FY26, and existing & new debt. Adani Group has $4 billion of bonds maturing in FY24 and FY26.
GQG Partners, a key investor in Adani Group with Rs 15,446 crore investments in Adani Enterprises (AEL), Adani Green Energy, Adani Ports and Adani Total Gas is also likely to further invest in the Gautam Adani-helmed companies.
Adani Group companies are executing large-scale projects across infrastructure and utility space, and need cash flows for these, while it is also in talks to raise about $800 million for new green energy projects. A series of expansion plans, including adding capacity at its cement business, were also on the anvil.
The company is expecting growth to come in from its core infrastructure business, allied businesses such as cement (it recently acquired Ambuja Cements and ACC) and FMCG among others, the group informed investors during the roadshows.
The group’s debt as of March 31, 2023, stood at Rs 2.27 trillion, of which 39% was in bonds, 29% loans from international banks and 32% with Indian banks and NBFCs. The gross value of the group’s assets was at Rs 3.91 trillion.
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For the group, more than 81% of Ebitda is from core infrastructure businesses. The Ebitda of its listed companies for nine months of FY23 rose 57% y-o-y to Rs 40,269 crore. The group had estimated an Ebitda of Rs 61,200 crore for FY23, a 20% growth over last financial year, it said.
Adani was represented by group CFO Jugeshinder Singh and head of corporate finance Anupam Misra at the investor shows convened to allay fears of any financial crisis. The roadshows reached out to the bondholders, bankers, investors and foreign institutional investors and shareholders.
