Banking News

adani green: Adani Green to seek board nod to raise up to $1 billion

Adani Green Energy is set to seek board approval to raise ₹6,150 crore ($750 million) to ₹8,200 crore ($1 billion) through the qualified institutional placement (QIP) route, said people aware of the matter.

Two group companies had got approval of their boards for fundraising on May 13 -Adani Enterprises (₹12,500 crore) and Adani Transmission (₹8,500 crore).

The exercise is part of a group plan outlined internally last year to build a “three-year equity cushion” to support expansion plans.

Adani Green has secured such capital-raising permission every year from its board except in 2021, as per a Bloomberg analysis.

The capital raised by Adani Green Energy will be used to repay an outstanding $750 million, three-year bond issued in 2021 that’s due next year. The money is likely to be kept in a dedicated redemption reserve account and paid on the due date, said the people cited above.

The original plan had been to prepay the bond after special Reserve Bank of India (RBI) approval but the company decided against this move.

“We do not comment on routine business matters. All public disclosures on business matters are disclosed when appropriate,” an Adani Group spokesperson told ET. Adani Green is also renegotiating the terms of its agreement with French utilities giant TotalEnergies for a proposed $4 billion investment in a green hydrogen venture, having signed a memorandum of understanding in 2022. In February, Total said it was pausing the plan in the wake of the Hindenburg Research report on the Adani Group alleging stock manipulation and fraud. The Adani Group has rejected the report’s findings.

Total had said it won’t immediately proceed with the plan that involved taking a 25% stake in Adani New Industries Ltd (ANIL), a subsidiary of Adani Enterprises.

In June last year, ANIL and TotalEnergies had outlined a capex plan of $50 billion to set up a 2.5 million metric tonnes per annum (mmtpa) of green hydrogen manufacturing capacity over the next 10 years, with the first phase of 1 mmtpa expected to be commissioned before 2030. Total had also made a total $10 billion capital commitment to the hydrogen venture, standing guarantor to 50% of the project’s debt, translating to $6 billion, ET had reported February 13.

ANIL plans to manufacture green hydrogen and downstream products such as ammonia, urea, methanol and ethanol at its Khavda and Mundra SEZ facilities. The Khavda site has a land bank of 71,000 acres, which has a large-scale renewable deployment potential of 20 GW due to its high wind and solar resource potential.

After the initial MoU, a more detailed ‘heads of agreement’ – pre-contractual negotiations for a commercial framework – was originally planned to be signed between May and September this year. But this is unlikely at this juncture.

The Adani Group has, however, continued with the project work in Mundra on its own, aiming to complete a substantial part of the first phase of the integrated manufacturing ecosystem for ANIL by December.

This involves 4.5 GW of solar module manufacturing capacity and 1.5 GW of wind turbine manufacturing capacity along with electrolysers, glass, aluminium frames etc. Analysts say over 5% of the total capex has already been incurred by Adani though the bulk of the work is scheduled for 2026-2028.

Source link