At the heart of Gautam Adani’s infrastructure empire, engineers put together billets of steel to build wind turbines. Nearby, at his four candy-striped cooling tower-clad factories at India’s largest private coal-fired power plant, workers operate machines that spit out solar panels.
The three facilities are part of the 37,000-acre Mundra Port and Special Economic Zone, a showcase for Adani’s sprawling conglomerate and home to billions of dollars of new investment in everything from copper smelters to coal-to-plastic plants. Destination.
Asia’s richest man is embarking on a fundraising effort to manage his debt and continue his rapid expansion. He faces questions about company influence and investor pressure to move away from fossil fuels. It has committed to invest $70 billion and continues to grow its multinational coal business.
Adani, who raised $2 billion this year from Abu Dhabi fund International Holding Company, said he expected further investment from “many sovereigns.” He added:
Adani’s fundraising ambitions are similar to those of fellow tycoon Mukesh Ambani. His Reliance Industries has raised $20 billion from global investors including Facebook, KKR and Mubadala in 2020 as it seeks to cut its debt.
Adani’s renewable energy division raised $750 million in green bonds this year, and in December announced a $200 million yen-denominated refinancing facility with MUFG Bank and Sumitomo Mitsui Banking Corporation acting as lead lenders Did. Another publicly traded company, Adani Enterprises, is seeking to raise approximately $2.5 billion by issuing new shares to individual and institutional investors.
Praveen Jagwani, chief executive of Singapore-based Indian asset manager UTI International, said investors were “very polarized” over Adani Enterprises’ funding because the listed company’s valuation is so high. said Mr. Jagwani said that Adani is raising money mainly “to reduce the burden of interest. Equity is much cheaper than debt.”
In an interview at his office in Ahmedabad, Gujarat’s business hub, Adani said he was confident in financing renewable businesses based on the urgent need to decarbonise. .
“every day [multilateral] The agency has a financing obligation. Every banking system, every hedge fund, every private equity he fund, every investor…under pressure not to invest in fossil fuels, but in the energy transition,” Adani said. rice field.
Adani claimed 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, Reliance,” he said, referring to his two conglomerates that also invest heavily in renewable energy. “So when someone wants to invest in India, where do they go first?”
A college dropout and former diamond merchant, Adani is expanding into new markets at a breakneck pace. This year, the group acquired Holcim’s Indian cement business in his $10 billion deal funded by foreign banks, making it overnight his second-largest cement company in the country. The group also raised $760 million from seven state-owned banks to build a copper smelting plant and announced $7 billion in alumina and iron ore projects.
Adani’s debt-driven growth has raised concerns about borrowing, with CreditSights, part of Fitch, warning the group is “very over-leveraged”. According to Adani Group, the company’s total debt is Rs 1.95 trillion ($24 billion), which is almost seven times its profit before interest, tax, depreciation and amortization of Rs 296 billion. To do.
Adani claimed some analysts ‘didn’t understand’ [his businesses] Substantially”.
“I understand who is my lender, my banker, my global investor. Whenever Adani enters the market, they love to invest. is how we are continuously growing.”
Critics said that while Adani’s push for renewable energy helped him raise money, his pollution business continued to grow. It has been incredibly successful in convincing the Western market that funding Adani Green is not funding Adani Power or Adani Enterprises,” said Climate Energy Finance. director Tim Buckley said. , an Australian think tank.
Adani said that “less than 10%” of the group’s revenue comes from coal, arguing it was unfair to demonize India’s use of its abundant coal reserves.
The billionaire businessman said he benefited from aligning his renewable energy push with India’s interests and New Delhi’s decarbonization goals. “We aligned our business with our business ambitions in line with the government’s intentions, so we were always in the tailwind.”
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But experts said a stronger turn away from coal was needed. Adani’s “fossil fuel investments are likely to stall in the coming years,” said Vibhuti Gaag, director of South Asia at the Institute for Energy Economics and Financial Analysis.
Adani plans to build its first ‘green ammonia’ facility within 100 km of Mundra. This is part of his $50 billion 10-year commitment with French energy group TotalEnergies.
Still, environmentalists criticize the ticks for stepping up mining. As a contractor, Adani Enterprises said he has mined 27.7 million tons of coal during the fiscal year ending 2022. This is a 58% increase over the previous year. Adani is also building a coal-fired power plant under commitments made several years ago.
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Adani conceded that “power from renewable sources is cheaper,” but argued that solar and wind power aren’t “24/7,” so fossil fuels are needed. refused to commit to the goal of phasing out coal.
“Why do we have to make a commitment to the world that we have to cancel after two years?” It noted that it had backed away from its commitment to coal.
“Self-reliance . . . energy transition, climate change, these are huge business opportunities,” says Adani. “You’re helping the planet, you’re helping the country, but at the same time, as a company, these are big business opportunities.”
