Adani Group seeks $750 mn from banks to pay for conversion of warrants

Ambuja Cements had assigned 477.4 million convertible warrants to Harmonia Trade and Investment, a unit of the Adani family, back in October 2022. While an initial payment of Rs 5,000 crore was made by the Adani family, the remaining Rs 15,000 crore was scheduled to be paid within the subsequent 18 months. As of March this year, the family has disbursed Rs 6,661 crore towards this commitment, said the newspaper.

The Adani Group needs some $1 billion (Rs 8,336 crore) to pay a loan instalment due before April 18. Around $200-250 million (Rs 2,000 crore approx) has been secured from certain banks, with efforts underway to obtain the remaining $750 million, it said, citing a source.

Out of the total 477.4 million warrants issued, the company aims to convert approximately 265.5 million by the April 18 deadline. This conversion will elevate the promoters’ shareholding from 66.7 per cent as of March-end to 70.3 per cent.

The Adani family anticipates a notional gain of around Rs 9,869 crore based on the current stock price. The warrants were originally issued at Rs 418.87 per unit, totaling Rs 20,000 crore, whereas the current trading price of Ambuja Cements’ stock stands at approximately Rs 625.55 per share, thus valuing the converted shares at Rs 29,869 crore.

The newspaper reported that it would be economically prudent for the Adani Group to convert warrants into shares due to the substantial rise in stock prices. It was also mentioned that if there were any shortage in financing, the group was ready to infuse funds from its own reserves.

However, the Adani Group might encounter challenges in securing the full amount from banks within the given timeframe. “Due to the stringent deadline, they may face a deficit of around 10-15 per cent of the total funds, but arrangements for the remaining amount appear to have been made,” said the newspaper, citing another source.

First Published: Apr 12 2024 | 12:21 PM IST