Gautam Adani’s conglomerate Adani Group is in talks with the State Bank of India (SBI) to raise approximately Rs 12,000 crore in long-term project loans that would be used to build India’s largest-ever highway project – the greenfield Ganga Expressway, which will connect to Meerut with Prayagraj. Last December, Adani Enterprises (AEL) won contracts from the government of Uttar Pradesh to construct three sections of the 594 km Ganga Expressway.
Citing people aware of the matter, ET reported that SBI is conducting a road traffic investigation before finalizing the loan terms. The company has the largest share of Phase 1 (594 km) of the six-lane highway, which can be expanded into an eight-lane, green Ganga Expressway from Meerut to Prayagraj.
Although the conditions are not yet final, the loan will have a longer term, between 10 and 30 years. The loan, if approved, can be offered at a high single-digit interest rate ranging from 7 to 9 percent, and the bank can resell portions of the total loan provided to other local banks. named.
“The bank is conducting a road traffic investigation with the help of an outside agency, which could be one of the Big Four firms,” a source told ET. This research helps predict the potential tolls that the project may generate upon completion. The bank will therefore determine the ratio between debt and equity. So, suppose if the toll has a higher toll potential, that will decrease the share of equity. The debt-to-equity ratio can reach 80:20 if there are no parallel roads, making the prospects for higher tolls more favourable.
The 594-kilometer highway will span Meerut, Hapur, Bulandshahr, Amroha, Sambhal, Badaun, Shahjahanpur, Hardoi, Unnao, Rae Bareli, Pratapgarh and Prayagraj districts. It starts in Bijauli village in Meerut and ends near Judapur Dandu in Prayagraj.
According to a statement from the Prime Minister’s Office, the highway will also boost multiple sectors, including industrial development, trade, agriculture and tourism.
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 invest more than Rs 55,000 crore in the coming years in new energy, airport and road sectors.
Defining itself as an “incubator for building diverse new businesses,” Adani Enterprises (AEL) has four business lines: resources, transportation and logistics, utilities, and strategic. The road segment, which is part of the company’s transportation and logistics industry, will see the maximum capital expenditure in the next 5-6 years, the company said earlier.
Adani Group’s company Adani Enterprises Ltd. (AEL) posted a consolidated net profit attributable to owners of Rs 304.32 crore for the quarter ended March 31, 2022. After growing 30 percent year on year (on an annual basis), AEL’s consolidated net profit attributable to owners was Rs 233.95 crore for the quarter ended March 31, 2021 of the previous financial year. AEL’s consolidated revenue grew 83.66 percent in Q4 of FY22 from Rs 25,141.56 crore, from Rs 13,688.95 crore in Q4 of FY21, according to the filings with the exchanges.
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