Adani Gas stock soars 6% on securing $375 mn funding to expand city gas distribution biz

Adani Gas stock has rallied 32 percent in the past one year, outperforming Nifty's returns of 27 percent.

Shares of Adani Total Gas surged over 6 percent on September 23 after the company successfully secured a financing package of $375 million from global lenders.

The city gas joint venture between Adani Group and TotalEnergies of France said that this financing marks the largest global funding initiative in the CGD (city gas distribution) business.

The funding is designed to accelerate Adani Total Gas' network infrastructure development programme. The initial commitment of $315 million comes with an accordion feature, allowing for increased funding based on the company’s business plans, it said in a regulatory filing.

Five prominent international lenders participated in this financing, including BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation. The facility will fast-track the capital expenditure programme, enabling Adani Gas to rapidly expand its CGD network into its 34 authorised geographical areas (GAs) across 13 states.

Follow our market blog to catch all the live action

This development agenda will cater to up to 14 percent of India’s population, covering more than 200 million people. The expansion will deepen the penetration of piped natural gas (PNG) and compressed natural gas (CNG) infrastructure, creating an ecosystem for a gas-based economy, Adani Gas said.

Parag Parikh, CFO of Adani Gas, said, "Participation from the global lenders reinforces the potential of city gas distribution in its role as a transition fuel. This financing framework will drive ATGL’s sustained growth and will be a stepping stone for future financing based on its capital management plan, which will create long-term value for all our stakeholders."

Latham & Watkins LLP and Saraf & Partners were the borrower's counsel and Linklaters and Cyril Amarchand Mangaldas were the lender’s counsel for this financing.

At 9:19 am, Adani Total Gas shares were trading over 5.8 percent higher at Rs 835 on NSE. The stock has rallied 32 percent in the past one year, outperforming Nifty's returns of 27 percent. Year-to-date, however, the counter has fallen 16 percent. In comparison, Nifty rose 19 percent during this period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.