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

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 a major blow from the allegations made in the Hindenburg Research report, a consortium of banks led by the State Bank of India (SBI) has agreed to finance a substantial part of the Adani Group's Rs 34,000-crore polyvinyl chloride (PVC) project in Mundra, The Hindu Businessline (BL) has reported.

With credit support from SBI, the PVC project is set to achieve financial closure by the middle of August. The funding for the first phase of the project will be taken by the public sector banks which 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 executed by a subsidiary of Adani Enterprises, Mundra Petrochem which has set its eyes on installing the plant with an annual capacity of one million tonnes in the first phase at a total cost of $2.5 million. The plan is to double the capacity in the second phase after the first phase is commissioned by 2025-26, the BL report said.

The coal-to-PVC project of the Adani Group is an important part of the group's ambitious plans to develop a petrochemical cluster at Mundra and Central. The group plans to be a major player with a significant share in the segment.

The news assumes significance as it is the first major financing deal after the Hindenburg report which came out in January. The report damaged the group's plan to raise Rs 20,000 crore via a follow-on public offering and dealt a major blow to its expansion plans in the short run.

As things stand, domestic lenders including government banks and private banks have only 16 per cent exposure to the group. More than one-third of the group's loans have been sourced through bonds from global financial institutions, the report added.