A consortium of banks led by the State Bank of India (SBI) has agreed to back major financing in part of the Adani Group’s Rs 34,000 crore polyvinyl chloride (PVC) project in Mundra, as reported by The Hindu. With the credit backing from SBI, the PVC project is set to achieve its financial closure by the middle of August.
The first phase in the project funding will be taken by the public sector banks (PSBs) which will be picking up the bulk of the tab of around Rs 14,500 crore. The rest of the amount will be financed by private lenders, as per the report.
The project will be executed by Mundra Petrochem, a subsidiary of Adani Enterprises. The firm aims to instal the plant with an annual capacity of one million tonnes during the first phase of the project at a cost of $2.5 million. Mundra Petrochem aims to double the capacity during the second phase of the project. The first phase is said to be commissioned around 2025-26.
The coal-to-PVC project is seen as a major ambition of the Adani Group, which aims to become a significant player with a majority share in the segment. Currently domestic lenders which includes government banks and private financial institutions has a 16 percent exposure in the Adani Group and more than one-third of Group’s loan is sourced from global financial institutions.
The Adani Group, whose businesses diversifies from ports to power and cements is looking to raise funds from Indian banks after suffering a major blow from the allegations made by the New York based short-seller Hindenburg Research. The conglomerate lost over Rs 12 lakh crore in its market value after the allegations which the Gautam Adani led group has since denied.
