India’s Gautam Adani targets sovereign funds in capital raising spree


In the heart of Gautam Adani’s infrastructure empire, engineers slot steel pieces together to make wind turbines. Nearby, workers operate machines in a factory spitting out solar panels, overshadowed by four candy-striped cooling towers of India’s largest private coal-fired power station.

The three facilities are part of the 37,000-acre Mundra port and special economic zone, the showpiece of Adani’s sprawling conglomerate and the destination for billions of dollars in new investments, from a copper smelter to a coal-to-plastic factory.

Asia’s richest man is embarking on a fundraising effort to manage his debt and continue his rapid expansion, as he confronts questions about the company’s leverage and investor pressure to move away from fossil fuels. The 60-year-old first-generation entrepreneur has pledged to invest $70bn in green energy technology by 2030, even as he continues to grow a multinational coal business.

Adani, who raised $2bn from Abu Dhabi fund International Holding Company this year, said he expected further investment from “many sovereigns”. He added: “We want our investors to be as long as the Adani family.”

Adani’s fundraising ambitions echo that of fellow tycoon Mukesh Ambani, whose Reliance Industries tapped global investors including Facebook, KKR and Mubadala for $20bn in 2020 as it sought to cut down debts.

Adani’s renewables unit raised $750mn in green bonds this year, and in December announced a $200mn yen-denominated refinancing facility with MUFG Bank and Sumitomo Mitsui Banking Corporation acting as principal lenders. Adani Enterprises, another listed entity, is seeking to raise around $2.5bn from issuing new shares to retail and institutional investors.

© Chloe Cornish/FT

Investors “are notably polarised” over Adani Enterprises’ fundraising because the listed entity has very high valuations, said Praveen Jagwani, chief executive of UTI International, an Indian asset manager in Singapore. Jagwani added that Adani was raising funds largely to “reduce the interest burden. Equity is way cheaper than debt”.

During an interview at his offices in Gujarat’s business capital Ahmedabad, Adani said he was confident about securing financing for renewable businesses based on the urgent need to decarbonise.

“Every [multilateral] agency has obligations to finance. Every banking system, every hedge fund, every private equity fund, every investor . . . is under the pressure of not investing in fossil fuels and investing into the energy transition,” Adani said.

Adani insisted that his group would be the first port of call for international investors betting on India. “We are the largest group in India, followed by Tata, followed by Reliance,” he said, referring to two conglomerates that are also investing heavily in renewables. “So when someone wants to invest into India, where will they go first?”

Adani, a college dropout and erstwhile diamond merchant, is pushing into new markets at a breakneck pace. This year, the group acquired Holcim’s Indian cement business in a $10bn deal financed by foreign banks to become the country’s second-largest cement player overnight. The group also raised $760mn from seven state-owned banks to build a copper-smelting plant and announced $7bn in alumina and iron ore projects.

Adani’s debt-fuelled growth has raised concerns about its borrowing, with CreditSights, part of Fitch, warning that the group was “deeply overleveraged”. Adani Group said its companies had combined debts of Rs1.95tn ($24bn), almost seven times combined earnings before interest, tax, depreciation and amortisation of Rs296bn.

Adani argued that some analysts “have not understood [his businesses] in real terms”.

“Who understands are my lenders, my banks, my global investors. Every time Adani comes into the market, they love to invest. And that’s how we are continuously growing.”

Critics said Adani’s renewables push helped him raise money while his polluting businesses continued growing. Adani has been “phenomenally successful to date at convincing the western market that the right hand is different to the left hand, and if you fund Adani Green you are not funding Adani Power or Adani Enterprises,” said Tim Buckley, director of Climate Energy Finance, an Australian think-tank.

Adani said that “not more than 10 per cent” of the Group’s revenue came from coal, while contending that it was unfair to demonise India for using its abundant coal reserves.

The billionaire businessman said that he benefited from aligning his renewables push with India’s interests and New Delhi’s decarbonisation goals. “We aligned our business and business ambition in line with government wishes. And because of that we always got tailwind.”

But a stronger pivot away from coal is necessary, said experts. Adani’s “investment into fossil fuels is likely to get stranded in the next few years,” said Vibhuti Garg, south Asia director at the Institute for Energy Economics and Financial Analysis.

Adani is set to build his first “green ammonia” facility less than 100km from Mundra, part of a $50bn, 10-year commitment with French energy group TotalEnergies, which owns a 20 per cent stake in Adani’s listed renewable energy company.

Still, environmental activists have criticised Adani for ramping up mining. As a contractor, Adani Enterprises mined 27.7mn metric tonnes of coal during the financial year ending in 2022, a 58 per cent jump on the previous year. Adani is also constructing coal-fired power stations under commitments made several years ago.

Adani admitted that “the electricity coming out of renewables is cheaper” but insisted fossil fuels were needed because solar and wind power “is not 24/7”. He declined to commit to targets on phasing out coal.

“Why do we have to go and make a commitment to the world which two years down the line you have to reverse?” Adani said, pointing out that western countries backed away from coal commitments as a result of energy market turbulence caused by Russia’s invasion of Ukraine.

“Self-reliance . . . energy transition, climate change, these are big, huge business opportunities,” said Adani. “You are helping the planet, you are helping the country, but at the same time, as a corporate, these are huge business opportunities.”


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