Adani Group revives Mundra PVC project, gets credit line worth Rs 14,000 cr

After a four-month suspension, Adani Group has revived its investment plan for India's largest polyvinyl chloride (PVC) plant, Mundra Petrochem Ltd, Mint reported on Wednesday. For this, it has received in-principle approval for a credit line of up to Rs 14,000 crore from several banks.

The project's total cost is expected to be around Rs 35,000 crore.

A person aware of the matter was cited in the report as saying that at least half a dozen local banks are part of the consortium that has approved lending money to the group. Most of the funds may come from state-run lenders, and private lenders will lend at least Rs 4,500 crore.

The group will seek an additional $2 billion for the Mundra project after fully utilizing the initial $2 billion sanctioned.

Earlier this year, Adani Group announced that it was putting major equipment procurement and site construction activities for the Rs 34,900 crore petrochemical project at Mundra on hold as the project had "not yet tied up finances".

The group's flagship Adani Enterprises Ltd (AEL), incorporated a wholly-owned subsidiary, Mundra Petrochem Ltd, in 2021 to set up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in the Kutch district of Gujarat.

"The financial closure of the Green PVC project of Mundra Petrochemicals Limited ( MPL) is pending with the financial institutions and it is in their active consideration," Adani Enterprises had said in a regulatory filing.

Due to recent market developments, the management has decided to continue with the engineering design and other activities, including financial closure in an accelerated mode, it added.

"Pending the above, it has been decided to keep the major equipment procurement and site construction activities on hold," AEL said. "We are hopeful to obtain financial closure for the project in the next six months post which full-fledged procurement and construction activities at the site will commence. We are committed to completing the project in an expeditious manner so as to meet the original timelines."

After Hindenburg Research's January 24 report alleged accounting fraud, stock manipulations and other corporate governance lapses, chopping off about $140 billion from the market value of Gautam Adani's empire, the apples-to-airport group has drawn a comeback strategy to claw back and calm jittery investors and lenders by repaying some loans to address concerns around debt and consolidating operations.

The group has denied all allegations levelled by Hindenburg.

The main goal of the Mundra unit was to have a PVC production capacity of 2,000 kilo tonne per annum (KTPA), requiring 3.1 million tonnes per annum (MTPA) of coal to be imported from Australia, Russia and other countries.