SBI, other PSBs to fund Adani’s Rs 34,000 cr PVC project in Mundra

As Adani Group looks to raise funds from Indian banks after the big hit from the allegations in the Hindenburg Research report, a consortium of banks led by State Bank of India (SBI) has agreed to finance a major portion of Adani Group’s Rs 34,000 crore Polyvinyl Chloride (PVC) project in Mundra, Hindu Business Line (BL) It has been reported.

With credit support from the SBI, the PVC project is set to achieve financial close by mid-August. The first phase of the project will be financed by public sector banks who will pick up the bulk of the tab of around Rs 14,500 crore. The remaining amount will be financed by private lenders, the report said.

The project is being implemented by Mundra Petrochem, a subsidiary of Adani Enterprises, which set its sights on installing the plant with an annual capacity of one million tons in the first phase, at a total cost of $2.5 million. The plan is to double capacity in the second phase after the first phase becomes operational by 2025-26 BL The report said.

The Adani Group’s coal-to-PVC project is an important part of the group’s ambitious plans to develop a petrochemical complex in Mundra and Central. The group plans to be a major player with a large stake in this sector.

The news is significant because it is the first major financing deal after the Hindenburg Report released in January. The report hurt the group’s plan to raise ₹20,000 crore by pursuing an IPO and dealt a major blow to its expansion plans in the short term.

As it stands, domestic lenders, including state and private banks, have only 16 percent exposure to the group. The report added that more than a third of the group’s loans were obtained through bonds from international financial institutions.