Billionaire Gautam Adani’s conglomerate started two defense facilities in northern India this week at an investment of ₹30 billion ($362 million), bolstering the country’s campaign to become self-reliant and promote local manufacturing.
Built by Adani Defence & Aerospace, a closely held firm in the Adani Group, at Kanpur in the Uttar Pradesh state across 500 acres, these factories will produce small, medium and large caliber ammunition for the armed forces, paramilitary forces and police, according to Karan Adani, founder’s son who’s overseeing the fledgling defence business.
The factories will produce 150 million rounds of ammunition annually—roughly a quarter of India’s requirements—and cater to the diverse needs of the Indian Armed Forces, he said during the inauguration on Monday.
Prime Minister Narendra Modi has ratcheted up calls to boost indigenous manufacturing and reduce reliance on imports, creating business prospects worth billions of dollars for the country’s conglomerates such as the Adani Group, Tata Group, Larsen & Toubro Ltd. and Mahindra Group.
India’s heavy dependence on imports for defense requirements has not only constrained the country’s strategic autonomy but also limited its economic potential, said Adani, who’s also the chief executive officer of Adani Ports and Special Economic Zone Ltd.
The manufacturing facility, that is expected to create over 4,000 jobs, aims to produce 200,000 rounds annually of large caliber artillery and tank ammunition by 2025, and five million rounds of medium caliber ammunition a year later. It’ll also be capable of making short-range and long-range missiles.
Adani Defence already manufactures drones, anti-drone systems and small arms including light machine guns, assault rifles and pistols, according to the company’s website.
Adani taps banks for first-dollar bond sale post-Hindenburg
Adani Group companies have mandated banks to arrange a series of investor meetings regarding the sale of senior secured dollar notes, according to a person familiar with the matter.
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Parampujya Solar Energy Pvt. Ltd, Prayatna Developers Pvt. Ltd, and Adani Green Energy Ltd appointed banks including Barclays Plc, DBS Bank Ltd, Deutsche Bank AG, said the person, who asked not to be named as the matter is confidential.
Senior secured notes in the amount of $409 million may follow. The group will be meeting investors in Hong Kong and Singapore.The sale stands to become the conglomerate’s first overseas issuance since a report by US short seller Hindenburg Research in 2023 prompted concerns about the group’s finances.
Fitch assigns Adani Green Energy RG1’s proposed USD notes ‘BBB-(EXP)’; outlook stable
Fitch Ratings has assigned Adani Green Energy Ltd Restricted Group 1’s (AGEL RG1) proposed 18-year fully amortising senior secured notes due 2042 an expected rating of ‘BBB-(EXP)’. The Outlook is Stable. AGEL RG1 plans to use the proposed US dollar notes to refinance its five-year bullet USD500 million senior secured notes due 2024. The proposed notes will have security and protective structural features similar to the existing bullet notes.
The proposed notes will be issued in part by each of the three SPVs in the restricted group (RG): Adani Green Energy (UP) Ltd, Parampujya Solar Energy Private Ltd and Prayatna Developer Pvt Ltd. The notes will be stapled together to mimic the structure of the restricted pool. The issuers directly own operating assets and are not merely lenders to the operating entities, unlike other rated issuance from most Indian RGs. All covenants or triggers are on an aggregate basis.
Each SPV guarantees the note obligations of the other two SPVs, but the notes constitute each issuer’s obligations only on a several basis. The RG generates an average annual debt service coverage ratio (DSCR) of 1.39x, with a minimum of 1.29x under Fitch’s rating case—commensurate with a ‘BBB-‘ rating.
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The final rating is contingent upon the receipt of final bond documents conforming to information already received.
