Adani Group seeks to raise a long-term loan of Rs 12,000 crore from SBI to construct Ganga Expressway

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Adani Group will build 3 out of four sections in Ganga Expressway.

New Delhi: Asia’s richest man, Gautam Adani’s conglomerate Adani Group is in talks with State Bank of India (SBI) to raise around Rs 12,000 crore in long-term project loans which would be used to build India’s biggest highway project ever, the new Ganga Expressway, which will connect Meerut to Prayagraj.

Quoting people familiar with the matter, HEY reported that SBI, the nation’s largest lender, is engaged in a road traffic investigation before taking a final call on loan terms.

Last year, Adani Enterprises Ltd (AEL) received an award letter from the Uttar Pradesh Highways Industrial Development Authority to implement three major sections of the 594 km Ganga Highway. The fourth tranche was awarded to IRB Infrastructure. AEL’s share of works is 80%, or approximately 464 km, of the total project.

Although the conditions are not yet finalized, the loan will have a longer maturity, between 10 and 30 years. The loan, if approved, can be offered at a high single-digit interest rate of around 7-9%, and the bank can resell a portion of the total loan to other local banks , the mentioned financial daily.

The Ganga Expressway is to be implemented on a Design, Build, Finance and Operate (DBFOT) basis. The Adani Group will construct 464 km from Budaun to Prayagraj, in three sections: 151.7 km from Budaun to Hardoi, 155.7 km from Hardoi to Unnao and 157 km from Unnao to Prayagraj. The 594 km long six-lane highway, expandable to eight lanes, will be constructed at an estimated cost of over Rs 36,200 crore, and the estimated cost against the three groups of AELs is around Rs 17,000 crore.

“The bank is carrying out a road traffic investigation with the help of an outside agency, which could be one of the Big Four firms,” one of the people quoted above told the daily. This survey mainly predicts the potential for recovering road tolls as it helps lenders to decide the debt ratio.

The higher toll collection potential reduces the share of equity. The gearing ratio can be as high as 80:20 if there are no parallel roads, which improves the prospects for higher toll collections.

The infra mega project is expected to be completed by 2024 and has the potential to generate huge real estate business opportunities for Uttar Pradesh as it covers around 12 densely populated districts including Hapur, Bulandshahr, Badaun and Raebareli.

Meanwhile, Adani Group closed the financing for the first phase of the Navi Mumbai International Airport project by raising a loan of Rs 12,770 crore from the SBI in March.

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