Adani Transmission to raise $500 million via FCBs

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Published: November 8, 2019 6:04:38 AM

The road shows for the fundraising exercise will cover all major Asian, European and American cities such as Dubai, Singapore, Hong Kong, London, New York and Boston. November 14 has been kept as the tentative date for pricing of the bonds.

Adani Transmission, FCB,  foreign currency bonds, corporate expansions, renewable electricityThe power transmission and distribution firm on Thursday reported a 114% year-on-year (y-o-y) increase in revenue from operations to Rs 2,587 crore on overall growth in the power demand during the September quarter.

The board of Adani Transmission (ATL) on Thursday approved a $500-million foreign currency bonds raising on a private placement basis to refinance its existing high-cost borrowings and fund other corporate expansions. The funds will be raised in one-or-more tranches in overseas market and the road show for which will start from November 10 till November 13, the company said in its earnings filing to the exchanges.

The road shows for the fundraising exercise will cover all major Asian, European and American cities such as Dubai, Singapore, Hong Kong, London, New York and Boston. November 14 has been kept as the tentative date for pricing of the bonds.

The board has further approved a buyback of existing non-convertible debentures (NCDs) and Rupee Masala bonds aggregating to Rs 2,290 crore in one or more tranches. Besides, they have raised the limit for external commercial borrowing to Rs 10,000 crore from Rs 5,000 crore.

Anil Sardana, managing director of Adani Transmission, told Financial Express that the buyback of existing NCDs and Rupee Masala bonds is part of the dollar denominated foreign fundraising of $500 million, which will be used to buyback the existing Rupee Masala bonds.

The power transmission and distribution firm on Thursday reported a 114% year-on-year (y-o-y) increase in revenue from operations to Rs 2,587 crore on overall growth in the power demand during the September quarter. The consolidated earnings before interest, taxes, depreciation and amortisation for the quarter was up 63% on year to Rs 1,082 crore, however, the operating margins fell to 41% from 54% a year ago on account of threefold increase in the cost of power purchased to Rs 666 crore compared with Rs 236 crore a year ago. The cost of fuel, too, rose to Rs 273 crore from Rs 109 crore a year ago. The margins in the transmission segment rose by 100 bps to 92% during the September quarter, while the distribution margins remained stable at 24%, the firm said.Net profit rose by 157% on year to Rs 230 crore on account of “robust growth” and “superlative operational performance,” Sardana noted.

“With a growing economy, the demand for power has also increased rapidly over the years. Toward this effort, ATL’s focus in FY20 has been in expanding our grid network and investing in technological advancements that will supply power to deficit parts of the country. Our recent acquisitions will make us the country’s largest private sector transmission company in India. We will continue our commitment to transmitting bulk green power within the country and catering to India’s climate goals.”

The firm had taken an approval for sourcing of 700 MW of hybrid power for the Mumbai distribution area which will match the exact load requirement for Mumbai and further reduce the tariff burden for customers in a year’s time, Sardana said.

The firm has a healthy order pipeline of Rs 8,000 crore which the company claims is good not just for the current financial year, but also for the next fiscal. “There are large opportunities coming in from the centre and state projects, especially for evacuation of renewable electricity for areas where the systems do not exist,” Sardana said. It has a capital expenditure plans of Rs 3,000 crore for FY20, which includes Rs 1,500 crore for distribution business.

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