Gautam Adani’s conglomerate Adani Group is in discussion with the State Bank of India (SBI) to raise about Rs 12,000 crore in long-term project loans that would be used to build India’s largest-ever expressway project—the greenfield Ganga Expressway, which will connect Meerut with Prayagraj. Last year in December, Adani Enterprises (AEL) won contracts from the Uttar Pradesh government to build three stretches of the 594-km Ganga Expressway.
Citing people aware of the matter, ET reported that SBI is engaged in a road traffic survey before loan terms are finalised. The company has the largest share of Phase 1 (594 km) of the six-lane, which is expandable to an eight-lane, greenfield Ganga Expressway from Meerut to Prayagraj.
Although the terms are yet to be finalised, the loan will be of a longer maturity — anything between 10 and 30 years. The loan, if approved, can be offered at a high single-digit rate of interest, in the range of 7-9 per cent, and the bank can down-sell parts of the total loan given to other local banks, the financial daily mentioned.
“The bank is conducting a survey on road traffic with the help of an external agency, which could be one of the Big Four firms,” a source told ET. This survey will help predict the potential toll collections that the project can generate post the completion. So, this will decide the bank the debt-equity ratio. So, say if the toll collection has a higher potential of toll collection then that will lower the share of the equity. The debt-equity ratio can be up to 80:20 if there are no parallel roads, brightening the prospects of higher toll collections.
The 594-kilometer expressway will span across the districts of Meerut, Hapur, Bulandshahr, Amroha, Sambhal, Badaun, Shahjahanpur, Hardoi, Unnao, Rae Bareli, Pratapgarh and Prayagraj. It will start from Bijauli village in Meerut and end near Prayagraj’s Judapur Dandu.
According to a statement released by the Prime Minister’s Office, the Expressway will also give a push to multiple sectors including industrial development, trade, agriculture, tourism among others.
The Ganga Expressway will be constructed over 6,500 hectares of land. The estimated cost against AEL’s three awards is Rs 17,000 crore.
Earlier this year, it was reported that Adani Enterprises will make capital expenditure of more than Rs 55,000 crore over the next few years in new energy, airport and road sectors.
Adani Enterprises (AEL) which defines itself as an ‘incubator on establishing diverse new businesses’ has four verticals – Resources, Transport and Logistics, Utility and Strategic. The road segment, which is part of the company’s Transport and Logistics vertical, will see the maximum capex outlay over the next 5-6 years, the company had said earlier.
Adani Group’s company Adani Enterprises Ltd. (AEL) posted a consolidated net profit attributable to owners at Rs 304.32 crore for the quarter ended March 31, 2022. Posting a growth of 30 per cent on a year-on-year (YoY) basis, AEL’s consolidated net profit attributable to owners stood at Rs 233.95 crore for the quarter ended March 31, 2021 in the previous financial year. AEL’s consolidated revenue grew by 83.66 per cent in Q4 of FY22 at Rs 25,141.56 crore, from Rs 13,688.95 crore in Q4 of FY21, according to its filings with stock exchanges.
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