Adani Group’s Debt Exposure Could Reach 10% in Domestic Capital Markets

Overview of Adani Group's Debt Strategy

The Adani Group can potentially double its debt exposure to the domestic capital markets up to 10% of the conglomerate's total loans, as shared by CFO Jugeshinder Singh. As of late March 2024, Indian capital markets account for about 5% of Adani Group's total borrowings.

Details on Debt Instruments and Capital Expenditure

Singh explained that as long as the financial instruments maturing within five years are utilized, an extent of 15% from local markets can also be achieved if longer-duration debts are included.

• The flagship company, Adani Enterprises, is set to introduce its first non-convertible debentures (NCD) issue of ₹800 crore.
• This issue will be available from September 4 to September 17 with interest rates ranging from 9.25% to 9.90%.
• Adani Enterprises plans to allocate ₹80,000 crore in capital expenditure across its ventures.

Debt Mix and Funding Sources

Singh elaborated that while metals and Poly Vinyl Chloride divisions will rely on domestic debt, projects associated with Adani Green and Adani Energy Solutions will garner funds from global markets.

He indicated that the focus is on risk-adjusted cost of capital rather than interest rates, highlighting that global debt is more economical for 20-30 year terms while domestic options lead for shorter durations.

Investor Sentiment and Market Adaptation

While Indian capital markets show a strong interest in adhering to debt, creating attractive offerings for domestic investors remains a critical challenge for the Adani Group.