The Adani Group is negotiating with banks to finance around ~6,200 crore, or roughly $750 million, to cover the conversion of warrants that Ambuja Cements has issued. The payment must be made by April 18 at the latest.
Harmonia Trade and Investment, a member of the Adani family, received 477.4 million convertible warrants from Ambuja Cements in October 2022. The Adani family paid `5,000 crore up front, with the rest `15,000 crore to be paid over the course of the following 18 months. The family has already paid `6,661 crore as of March of this year.
"Adani Group requires almost $1 billion to pay the second installment, which is due on April 18. About $200–250 million of this had been lent to certain institutions. For the remaining $750 million, they are contacting banks, according to a source.
By April 18, the corporation has to convert about 265.5 million of the 477.4 million warrants that were granted. The promoters' stake in the company will increase from 66.7% at the end of March to 70.3% following the conversion of warrants into shares.
Based on the current stock price, the Adani family stands to gain a notional amount of around `9,869 crore.
The Ambuja Cements stock is presently selling at about `625.55 apiece, therefore the total value of converted shares is ~29,869 crore. The warrants were granted at `418.87 per unit for ~20,000 crore.
Converting warrants to shares makes financial sense since stock prices have increased significantly. Thus, the organization is prepared to contribute funds out of its own pockets should there be a finance gap," the insider stated.
The Adani Group might not be able to obtain the entire sum from the banks, according to bankers. According to a second source, "they seem to have arranged the rest, but given the tight deadline, they may fall short of around 10-15% of the total funds."
Although they were hesitant to provide specifics regarding the loan terms, bankers said that the arrangement was extremely profitable for them. According to the source, the price reflects the transaction's risk.
