Adani Group's CFO Shares Insights on Growing Debt Exposure in Domestic Capital Markets
Strategic Growth of Adani Group's Debt Exposure
Mumbai: The Adani Group can double its debt exposure to the domestic capital markets to 10% of the conglomerate's total loans as long as the instruments used to raise funds mature within five years, stated the group's chief financial officer, Jugeshinder Singh.
Currently, Indian capital markets account for about 5% of Adani Group's total outstanding borrowings, which stands at ₹12,404 crore, as of March-end, 2024.
New Non-Convertible Debentures Issuance
The group recently launched its maiden non-convertible debentures (NCDs) issue of ₹800 crore, which will open on September 4 and close on September 17. The debt instruments are available in three tenures of 24, 36, and 60 months, with interest rates of 9.25%, 9.65%, and 9.90%, respectively.
- Adani Enterprises outlined a capital expenditure of ₹80,000 crore for various businesses, including airports and roads.
- The current cost of capital is around 9% on a weighted average basis.
Funding Mix Between Domestic and Global Markets
Singh mentioned that infrastructure and energy developments in India should primarily utilize domestic capital. However, for businesses like Adani Green and Adani Energy Solutions, global debt will play a crucial role in funding.
- Current debt sourced from Indian lenders constitutes 36% of the total debt mix.
- Indian lenders have provided ₹88,100 crore to the Adani Group out of a total debt of ₹2,41,394 crore as of March 31, 2024.
Singh emphasized the importance of risk-adjusted cost of capital, indicating that global debt may be more cost-effective for longer-term financing. Adani Group is poised to adjust its capital strategy as required.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.