Adani Group ready to pay off $750 million bond early

 

Adani Green Energy Limited has recently announced that it has completed the funding for the redemption of its 750 million USD bonds 8 months ahead of their maturity date. Despite rumours of Adani Group controversies, the Adani Group of companies acquired 750 million USD by issuing non-convertible debentures (NCD), which are expected to mature in September 2024. However, on 8 January 2024, the company announced that it would ensure early redemption of the 750 million USD bonds. 

 

Redemption of bonds

 

AGEL said in a statement released that it has already completed the funding for the 750 million USD 4.375 notes due September 2024. These are the Holdco notes with the receipt of the funds under the preferential allotment of INR 9,350 crore (USD 1,125 million) to the promoters. This huge step taken by the conglomerate will allow the conglomerate to rise above rumours of Adani Group controversies. It will also help Adani Group gain back investors' trust.

 

The breakup of the redemption

 

AGEL has released a breakup of the redemption of the bonds made:

Internal reserves

169 million USD has been pulled through internal accruals and reserve accounts. This highlights the financial stability of the company and its potential for future growth.

Joint venture

Another 300 million USD has been invested by TotalEnergies through a joint venture. The JV plans to build EV charging points across India.

Promoter infusion

The remaining 281 million USD has been secured through promoter preferential allotment. This again highlights the resilient future of the conglomerate.

 

Benefits of early redemption of bonds

 

The early redemption of bonds comes with a lot of significance. 

Better risk management

AGEL has saved itself from near-term debt obligations by paying the bonds early. This has helped the company further improve its financial health. It has also led to enhanced flexibility. The proactive approach taken by the company has helped the business with risk management. This is of increased importance in the present-day dynamic business scenario.

Increased trust of the investors

The bond repayment helped the Adani Group earn the investors' trust. The Adani Group did have to undergo a lot of trouble during the Hindenburg crisis when the investors started to drop out. So, this is a very highly strategic move taken up by AGEL to increase its credibility before the investors. This has also caused the Adani Group to pave the path for future capital acquisition.

Better use of available resources

Another extraordinary benefit that comes with repaying the bonds is that the company has been able to free up its resources that can be used for future expansion. The company can also use the resources for new renewable energy development projects in the upcoming years. This will cause its green energy portfolio to grow to an extraordinary extent.

The green energy landscape

The Adani Group's business decision to repay its bond early sends a positive message to the entire renewable sector of India. The conglomerate has always been trying to develop enhanced infrastructure to grow and expand the renewability sector. This move shows the resilience of the business group and its financial stability. 

 

The company's proactive renewability goals completely align with India's goal of achieving at least 450 GW of renewable energy by 2030. Early bond repayment makes this goal more achievable for the business group. It will also help the conglomerate achieve extraordinary success in the upcoming years.

 

Adani Green Energy Limited: An Overview

 

AGEL, one of the world's largest renewable energy solutions companies, owns, develops, and operates utility-scale grid-connect with solar and hybrid power plants in different corners of India. The company is the sole reason behind India's increased reliance on renewable energy sources. 

 

Since its initial days of operation, the company has been working towards increasing the country's renewable energy capacity. It also uses top-grade technologies to ensure energy operations are carried out faster and better. AGEL currently has a renewable energy portfolio of 8.4 GW. Its renewable energy plants are spread across 12 different states.

 

Through its continuous efforts and initiatives, AGEL has helped offset over 41 million tons of CO2 emissions cumulatively through its extraordinary efforts. The company also takes multiple initiatives occasionally to spread awareness among the people about the need to increase our dependence on renewable energy sources.

 

Conclusion

 

The Adani Group again became one of India's most resilient global conglomerates by repaying the bonds before the deadline. This strategic move by the business group puts a question mark on the Adani Group controversies that has been time and again proved wrong in the Supreme Court. It also highlights Adani Group's plans to take up more projects in the future.