In a strategic move aimed at optimizing its financial structure, Adani Electricity Mumbai, a subsidiary of Adani Energy Solutions Ltd, has unveiled a tender offer to repurchase a portion of its outstanding senior secured notes worth $120 million set to mature in 2030.
In an official statement, the company outlined the details of the buyback, indicating its commitment to reducing leverage and aligning its financial position with the broader Adani portfolio companies. The entire buyback initiative will be financed through the company’s cash surplus and internal accruals, demonstrating a self-sustaining approach to enhance its financial matrices.
Adani Electricity Mumbai, the premier power utility in India according to the Ministry of Power’s 11th Annual Integrated Rating and Ranking for Power Distribution, serves an impressive consumer base exceeding 12 million and caters to a power demand of over 2,000 MW in Mumbai.
The company plans to conduct similar market actions periodically until the maturity of the bonds, contingent on favourable market conditions. This strategic move is expected to not only stabilize the yields of its outstanding bonds but also provide a superior outcome for both bond investors and shareholders.
In the context of current market dislocations in the yield curve influenced by external factors, including a high-interest rate environment, Adani Electricity Mumbai believes that such market actions will enhance investor confidence and support. The company aims to reinforce its commitment to financial prudence and stability, signalling resilience in the face of market challenges.
Adani Electricity Mumbai, as part of the Adani Group’s diversified business, holds a prominent position in the retail electricity distribution sector. The company boasts ownership and operation of the country’s largest and most efficient power distribution network.
Highlighting its dedication to sustainability, Adani Electricity Mumbai has made significant strides in power procurement from renewable sources. The company increased its share of renewable power procurement from 3% in 2019 to 30% and has set an ambitious target of reaching 60% by the end of fiscal 2027. Furthermore, the company has successfully reduced its greenhouse gas emission intensity by 38% since 2019.
