Adani Group looks to raise $750 mn via syndicated loans from five European banks

• Syndicated loan facility to refinance existing loans taken to acquire cement business from Holcim.
• Group’s debt is at $27 bn but the asset base has grown to $60 bn.
• Adani family has been repaying expensive share-backed loans that were taken to acquire the cement business.

The Adani Group is looking to raise $750-800 million through syndicated loans from five European banks to refinance loan facilities availed to fund the acquisition of its cement business from Holcim. The banks that are participating in this are Deutsche, Barclays, Standard Chartered among others.

The group had closed the acquisition of ACC and Ambuja Cement from Holcim in September 2022 for a consideration of $6.4 bn. The deal overnight made the Adani Group the second biggest cement in India with a capacity of 68 million tonnes after Ultratech Cement.

The Group generates 83% of its operating income from core utility and infrastructure businesses. The group’s operating income from its listed businesses grew by 36% year on year to Rs 57,219 crore in FY23. Core infrastructure businesses, which constitute 82.8% of the portfolio — energy, transport, logistics, and AEL's infrastructure ventures — clocked a 23% rise in operating income at Rs 47,386 crore.

The group has been debt raising capital from foreign banks to fund its growth ambitions across sectors. Adani Connex, its datacenter business, tied up the largest datacenter project financing in India with $213mn tied up from six international banks - SMBC, MUFG, Mizuho, ING, Natixis, SCB.

The group saw its stocks battered after short seller Hindenburg in January came out with a report questioning the group’s corporate governance practices and elevated debt levels.

The House of Adani has been funded by debt, which has grown to $27 bn over the last 5 years. However, the value of its assets has grown to $60 bn and its operating income has also increased to $ 7.5 bn.

The Adani family has prepaid $2.65 bn of share backed loans for the acquisition of its cement business to rebuild investor confidence. It has also raised equity capital from foreign investors like GQG Partners.