Aditya Birla Group has secured ₹24,000 crore in bank commitments, 70% above its original ask, to fund the acquisition of Shell's renewable assets in India.
Axis Bank, SBI, Union Bank and PNB have offered credit lines, with HDFC Bank and Kotak Mahindra Bank in talks to join.
The deal underscores rising lender appetite for large acquisition financing after RBI allowed banks to fund such deals from July 1.
Aditya Birla Group Secures ₹24,000 Cr In Bank Commitments For Shell Renewables Deal
The scale of commitments points to strong interest among Indian lenders in financing large corporate deals, as they compete with global banks in India's acquisition financing market, valued at more than $40 billion
Aditya Birla Group Chairman Kumar Mangalam Birla Aditya Birla Group
Summary
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A unit of Kumar Mangalam Birla's Aditya Birla Group has received bank commitments worth up to ₹24,000 crore ($2.5 billion) for an acquisition loan, nearly 70% more than the amount it had originally sought, according to a report by the Economic Times.
The group is seeking a ₹14,000 crore loan to fund its acquisition of Shell Plc's renewable energy assets in India. Axis Bank and State Bank of India have each committed up to ₹7,000 crore, while Union Bank of India and Punjab National Bank have offered credit lines of around ₹5,000 crore each, as per the report. Notably, actual disbursements are likely to be lower than these upper limits.
The report added that the conglomerate is also in talks with other large banks, including HDFC Bank and Kotak Mahindra Bank, which may extend additional credit lines.
According to the report, the scale of commitments points to strong interest among Indian lenders in financing large corporate deals, as they compete with global banks in India's acquisition financing market, valued at more than $40 billion. The Reserve Bank of India allowed domestic banks to finance corporate acquisitions starting July 1 as part of efforts to support economic growth.
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Under the deal, Aditya Birla Renewables will acquire full ownership of Solenergi Power, which controls a 5-gigawatt renewable energy portfolio through its holding in Sprng Energy, the entity that runs Shell's renewable assets in India.
The report said interest rates on the club loan range between 7.6% and 7.7%, with repayment tenors of 12 to 20 years. The loan is being raised through multiple special purpose vehicles backed by the company.
Separately, central bank data cited in the report showed that loans extended by Indian banks grew 18.3% to ₹220 lakh crore between January and August 15, outpacing an 14.7% rise in deposits over the same period.