Top domestic investors line up for Adani Power's largest onshore bond issue

Adani Power raised ₹7,500 crore through a non-convertible debenture (NCD) issue that saw several leading domestic investors, including ICICI, Axis, Kotak, Nippon, Tata and Invesco, line up to participate, people familiar with the matter said.

Interest in the offering has come from a broad mix of mutual funds, banks, insurers and other domestic institutions, with 17 institutions participating. Mutual funds are likely to have accounted for the bulk of the demand, the people said.

SBI MF invested ₹2,500 crore, ICICI Bank ₹1,100 crore, Axis Bank ₹1,000 crore, while Kotak MF and ICICI MF committed around ₹500-600 crore each.

”The business remains fundamentally strong, and operations have not been impacted by recent developments,” one investor said on condition of anonymity. Another investor said the developments were ”unlikely to cause any material damage to the company or the group”.

Proceeds from the NCD issue are likely to be used for refinancing existing borrowings and general corporate purposes.

Market participants said investor appetite is being supported by Adani Power’s strong and visible cash flows.

Nearly 90% of the company’s operating capacity is contracted under long-term power purchase agreements (PPAs), providing earnings and revenue visibility. Improved fuel sourcing, smoother logistics and more stable utilisation levels have also translated into stronger cash generation.

Adani Power, India’s largest private thermal power producer, operates around 18 GW of capacity and plans to expand this to 42 GW by FY32.

The company’s net debt-to-EBITDA stands at about 1.5 times, well below that of state-run NTPC at around 5 times and private peers such as Tata Power and JSW Energy at about 4-5 times.

Analysts have cited the faster conversion of capacity into long-term PPAs and the relatively low leverage as key positives.

Operating profit is expected to more than triple over the next five years, with EBITDA projected to rise from about ₹21,000 crore currently to around ₹75,000 crore by FY30, supported by capacity additions and efficiency gains.

Global rating agencies Moody’s and Fitch have earlier revised the outlook on Adani group entities to stable, citing limited near-term impact from the ongoing US investigation.

Fitch said in November that risks linked to the probe were ”manageable” in the near term.