SBI-led consortium of PSBs to fund Adani’s ₹34,000 crore PVC project in Mundra: 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 ₹34,000-crore polyvinyl chloride (PVC) project in Mundra, according to a report by The Hindu Businessline (BL). 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 (PSBs) which will pick up the bulk of the tab of around ₹14,500 crore. The remaining amount will be financed by private lenders, said the report.

The project is being executed by a subsidiary of Adani Enterprises, Mundra Petrochem which has aims to instal 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, said the report.

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.

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.

Also Read: Adani Group firms' valuation halves against 6% decline for top 500 companies: Report

The port-to-power conglomerate is looking to raise funds from Indian banks after a major blow from the allegations made in the Hindenburg Research report. The report damaged the group's plan to raise ₹20,000 crore through follow-on public offering and dealt a major blow to its expansion plans in the short run. 

The conglomerate lost over ₹12 lakh crore in market value after the US-based short-seller published allegations of stock market manipulation and other lapses against the group in January. The Gautam Adani-led group has since denied any wrongdoing.