Rs 18,587 crore: Adani Power is lining up roughly Rs 185.87 billion, about US$2.1 billion, in new borrowing to fund a major coal-fired expansion. The package calls for Rs 11,000 crore of non-convertible debentures and the rest in bank loans, with the company saying internal accruals will cover part of the cost, according to company filings and rating-agency disclosures. The push follows a surge in domestic power demand, and credit agencies warn the capex plan is a material risk to ratings. This Adani Group has also signaled ambitions to raise as much as US$10 billion in local debt over three years, a timetable that will shape its funding calendar.

Adani Power has told investors and ratings firms it needs roughly Rs 18,587 crore to expand thermal capacity and related infrastructure. The most detailed breakdown in the company’s papers shows Rs 11,000 crore of that sum would come from non-convertible debentures, while the balance would be borrowed from banks, with internal cash flow to cover part of the outlay, according to rating-agency filings and company disclosures.

Debt plan and who’s lending

The firm entered the market in late January with a local-currency bond sale of Rs 7,500 crore, its largest issuance to date. The group has been stepping up rupee fundraising this year. This Adani Group’s chief financial officer Jugeshinder Singh told investors the conglomerate had increased local-debt funding to the equivalent of about US$2 billion in 2025 and was targeting up to US$10 billion of new local borrowing over the next three years.

Lenders drawn to recent Adani paper include state-run insurers and public-sector finance houses, alongside major private banks. People cited in the coverage named buyers such as Life Insurance Corporation and Power Finance Corp, and banks including State Bank of India, HDFC Bank, ICICI Bank and Axis Bank as active participants across multiple group issuances.

The company’s filings show outstanding borrowings at the Adani Power level of at least Rs 28,855 crore as of September 2024. India Ratings reported a slightly different figure, citing outstanding debt of Rs 26,270 crore in a report issued on January 22, 2025. Those differences reflect timing and the scope of what each report counts, but they show a wide existing leverage base that the new borrowings would add to.

Demand tailwinds and credit alerts

Adani Power defends its expansion by pointing to strong short-term demand. The Indian government recorded a 20 percent rise in power consumption in the two years to 2024, and rating commentary shows Adani Power’s plant load factor climbed from 48 percent in fiscal 2023 to 65 percent in fiscal 2024, reaching 72 percent in the first half of the current fiscal.

Mastheads

Those operating gains are the revenue upside the company cites to justify adding capacity.

Credit agencies are less sanguine. Care Ratings said on January 7, 2025 that the company’s ratings are constrained by aggressive capital expenditure plans. India Ratings warned on January 22, 2025 that time and cost overruns on the expansion would be a key monitorable. Both agencies treated the expansion as a material financial risk that could pressure credit metrics if project execution slips or costs climb.

Environmental and local-community issues add another layer of implementation risk. Ratings commentary highlights concerns over a proposed three-fold expansion at the Kawai plant in Rajasthan, where project work has required requests to relocate a school and a clinic. Such local objections can delay construction and raise costs, the analysts say.

There is also elevated scrutiny around the group’s largest thermal unit, Mundra. Reporting captured in the research bundle says the Mundra plant has accumulated about US$1.8 billion of losses and that Adani routed more than US$1 billion of debt financing to the unit in ways some accounting specialists and auditors have questioned. That account appears in one report in the package and is therefore a single-sourced detail in the available coverage.

Adani Power presents an opposite view through its corporate materials. The company describes itself on its website as India’s largest private thermal producer, with installed thermal capacity of 18,110 MW across 12 plants and an additional 40 MW of solar capacity. The company argues that scale supports large capital spending to meet the surge in national demand.

Analysts and ratings agencies will be watching execution and the funding mix. This planned Rs 11,000 crore of debentures will be a test of investor appetite in the local market, especially as the group concurrently pursues broader rupee fundraising across subsidiaries.

Investors will also track how much of the expansion financing comes from bank loans versus capital markets, and whether internal accruals provide the cushion management expects. Those variables will determine near-term pressure on leverage and interest coverage ratios, which the ratings firms have flagged as possible stress points.

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The planned Rs 11,000 crore debenture issue will be the next market test of investor appetite for the Adani Group's rupee borrowing.

This article was created with AI assistance.