HDFC Bank Anchors ₹532 Crore Bond Issue for Adani Group’s Power Transmission Arm
HDFC Bank has facilitated a ₹532 crore funding round for WRSS XXI (Part), a special purpose vehicle (SPV) within the Adani Group’s transmission portfolio. The bond issue, structured to refinance external borrowings, underlines the ongoing shift in India’s infrastructure funding strategies, with domestic institutions playing an increasingly central role in supporting long-term capital requirements.
HDFC Bank Leads the Charge
In this transaction, HDFC Bank served as both the lead arranger and a principal investor. The bank invested ₹159.6 crore of its own capital in the ₹532 crore bond issue. The remaining portion was raised from additional investors, with Darashaw & Co stepping in to manage a ₹100 crore slice as a co-arranger. The involvement of such high-profile participants reinforces investor confidence in Adani Group’s infrastructure projects, particularly in the regulated transmission segment.
Bond Details and Financial Strategy
The bond issue is structured with a maturity of 18 years, extending up to 2043, and carries a fixed interest rate of 7.70% per annum. The long-term nature of the bond matches the lifecycle of infrastructure assets like power transmission lines, which generate predictable revenue over extended periods.
The instrument has been assigned a AAA rating, reflecting the issuer’s strong financial profile and low credit risk. Proceeds from the issue are being used to refinance existing external commercial borrowings (ECBs) taken earlier by the SPV. By shifting from foreign currency debt to Indian rupee-denominated bonds, the company aims to reduce exposure to currency volatility and interest rate fluctuations abroad.
About WRSS XXI and Its Role
WRSS XXI (Part) is one of several SPVs set up under the Adani Transmission umbrella to build and operate electricity transmission lines. These projects are vital for ensuring stable power supply across regions and for connecting renewable energy sources to the national grid. The company focuses on strengthening transmission infrastructure in Western India, facilitating better electricity flow between states and enhancing grid reliability.
This refinancing effort reflects a conscious move toward financial efficiency. By tapping into the domestic debt market, the SPV secures long-term funding aligned with the project’s operational lifespan, while also mitigating risks tied to foreign borrowing.
Investor Appetite and Institutional Trust
The fact that one of India’s top private sector banks has taken a lead role in both arranging and investing in the bond highlights growing institutional faith in the Adani Group’s utility ventures. While the group has faced criticism and scrutiny in global financial circles over the past two years, core infrastructure businesses like power transmission continue to command interest from serious investors.
A combination of strong credit ratings, a stable business model, and assured cash flows from regulated operations makes transmission SPVs attractive to banks, mutual funds, and other long-term investors. With a 7.70% coupon rate, the bond provides an attractive yield, especially in today’s prevailing interest rate scenario.
Advantages of Domestic Refinancing
By substituting foreign borrowings with rupee bonds, WRSS XXI reduces its dependence on overseas lenders and shields itself from exchange rate risk. Additionally, long-tenor debt minimizes the need for frequent refinancing and aligns well with regulatory frameworks that support long-term infrastructure investments.
Domestic capital raising also resonates with broader policy goals set by financial regulators and the government, who are encouraging corporates to access local funding avenues. This strategy not only supports financial stability but also nurtures the growth of India’s bond markets.
Strategic Implications for Adani Group
This transaction fits into Adani Group’s larger efforts to optimize its capital structure and reassure stakeholders. Since early 2023, the conglomerate has steadily worked on reducing debt, diversifying its financing channels, and bringing more transparency to its funding mechanisms.
Projects like WRSS XXI provide predictable returns, regulated tariffs, and long-term revenue visibility, making them ideal candidates for bond market participation. Raising funds through such mechanisms enhances financial discipline while freeing up capital for new investments in energy and infrastructure.
Conclusion
HDFC Bank’s ₹532 crore bond arrangement for Adani Group’s WRSS XXI represents a key step forward in India’s evolving infrastructure finance landscape. It reflects the growing reliance on domestic funding options for long-term projects and signals a maturing bond market ready to support critical infrastructure development.
The deal demonstrates how well-structured, asset-backed bonds with strong credit profiles can attract top-tier investors and reduce reliance on external borrowing. For Adani Group, this successful transaction reinforces the resilience of its core infrastructure business. For HDFC Bank, it further establishes the institution’s role as a reliable partner in financing India’s economic growth.
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