Business

Cash-hungry Adani utility shows funding urgency to power India

As shares of Gautam Adani’s conglomerate recover from an epic rout, the big question looming over the Indian tycoon is whether he can convince investors and lenders to back his capital-hungry businesses with fresh cash.

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Few parts of Adani’s empire underscore the urgency of that funding for the billionaire — and also for the government of Indian Prime Minister Narendra Modi — better than Adani Transmission Ltd.

India’s largest private utility is a key player in Modi’s pledge to provide power to every Indian home. In a media blitz on Monday, it touted itself as capable of “distributing electricity to every corner of the country.”

Yet the company faces a funding gap which may force it to infuse as much as $700 million by March 2026 to fulfill existing project commitments, according to the Indian unit of Fitch Ratings — and that’s before taking into account ambitions to expand even further in coming years.

The funding needs of infrastructure builders like Adani Transmission are a major factor behind the conglomerate’s race to return to business as usual, after months of damage control and denying US short seller Hindenburg Research’s allegations of widespread corporate malfeasance.

The stakes are also high for Modi, who faces national elections in early 2024 and has made infrastructure a core plank of his nation-building agenda.

Adani Transmission, which went from being a fledgling to India’s largest private utility in seven years, has grown its asset portfolio 3.6 times to 19,779 circuit kilometers (ckm) across 33 projects.

Of these, 13 projects are currently underway, but many face delays or cost overruns, including the largest one: the Warora-Kurnool Transmission line that runs through three large southern Indian states.

Others have been beset by adverse weather, pandemic-era disruptions or legal wrangles — common issues in infrastructural projects in India which makes the Adani group the rare private company that has been scaling up aggressively in this space.

With India planning to add more than 27,000 ckm of transmission lines by 2025, the company’s continued expansion will be crucial for the national goal.

The utility company earlier this month announced plans to raise as much as $1 billion — one of two Adani companies looking to issue new shares for the first time since the short seller crisis which wiped more than $100 billion off the empire’s market value.

“Adani Transmission has always been aggressive on capex so the $1 billion fundraising will help them maintain growth momentum at a time when the group as a whole has had to soften their targets to come out of this logjam,” said Kranthi Bathini, director of equity strategy at WealthMills Securities Pvt.

“It might have to also raise additional debt to finance their capex requirements as the transmission business has high working capital needs,’” he said.

Capital infusion required by March 2026 from the company in its ongoing projects has surged as much as 60 percent to 57.95 billion rupees ($700 million) compared to what was envisaged before, India Ratings and Research, the local unit of Fitch Rating’s, said in a March 30 statement.

This is due to cost overruns or the borrowings not being enough to support the projects, forcing the utility firm to invest more.

India Ratings revised its outlook on Adani Transmission to “negative to reflect this uncertainty around debt funding secured for the under-construction transmission lines.”

Any shortfall will require the company to invest more “to meet project completion deadlines, potentially creating cashflow mismatches over FY24, it said.

An Adani Group spokesperson said in an email that the conglomerate does “not comment on routine business matters.”

“All public disclosures on business matters are disclosed when appropriate, the spokesperson said in response to queries on how Adani Transmission plans to plug the funding gap.

‘Best Possible Assets’

Some high-profile investors are convinced about the large role units like Adani Transmission play in the country’s development.

GQG Partners’s Chief Investment Officer Rajiv Jain, one of the first investors to show support for the conglomerate after the Hindenburg attack, told Bloomberg last week that GQG had raised its investment in the Adani empire and its holdings were now worth $3.5 billion.

Jain said he is willing to buy into the group’s new share sale because “these are the best possible infrastructure assets available in India.”

Praising the conglomerate for its “quality of execution,” Jain said, “Who else in India is creating such quality infrastructure assets at this scale?”

Very few private sector firms in India have the risk appetite and ability to withstand the vagaries of infrastructure development in the sprawling, unwieldy country like Adani does.

Infrastructure projects are funded by a mix of debt and capital infusion, or equity, from the company. Delays, pricier inputs or legal challenges also push up project costs.

Its largest project by length, Warora-Kurnool Transmission line, or WKTL, is facing a cost-overrun worth 6.7 billion rupees due to higher input and execution costs, India Ratings said at the end of March. The company “management confirmed that it will fully support the project to fund the entire cost-overrun,” it said in the statement.

Another project ——Adani Electricity Mumbai Infra Ltd. or AEMIL ——was slow to start as the Tata Group mounted a yearlong legal challenge against Adani’s license.

Eight Adani transmission lines are expected to be operational by March 2024 after some delay, according to data compiled by Bloomberg from company presentations and government websites.

Favorable orders

The Adani Group’s effort to revert to pre-Hindenburg growth is gaining momentum from recent developments.

Besides being given reprieve earlier this month by a Supreme Court panel that found no evidence of regulatory failure or market manipulation so far in the episode, Adani Transmission has also won favorable regulatory orders to raise electricity tariffs in its operating projects to recoup past revenue shortfalls.

It’s another example of the company’s ability to navigate the difficulties of infrastructure building in India, as utilities generally cannot recoup higher costs incurred during project execution from end users as electricity tariffs are fixed through auctions. They need to petition the central or state regulator to approve higher tariffs, which usually involves a lengthy legal process.

The utility’s closely held subsidiary, Adani Electricity Mumbai Ltd., got a favorable order at the end of March from the state power regulator which allowed it to raise tariffs charged to consumers by 2.2 percent in financial year 2024 and by 2.1 percent in 2025.

It reported an 85 percent jump in profit to 4.4 billion rupees for the quarter ended March 31, boosted partly by a one-time income from favorable regulatory orders. Revenue rose 17 percent to 30.31 billion rupees, the company said in a late night Monday statement to exchanges.

Nevertheless, many investors are still waiting to see if the unit can find the funding it needs before buying back into the stock. Its shares, which are down 69 percent this year, have been one of the slowest to recover from the Hindenburg rout among the group’s listed entities. The stock slipped as much as 4.8 percent on Tuesday, ahead of its exclusion from MSCI India Index from May 31.

“For new buying to take place, there needs be a new investor,” said Deven Choksey, chief executive officer at local brokerage KR Choksey Shares & Securities. “We will have to wait for the proposed equity fundraise to conclude to see an appreciation of the stock.”
Read more:

Adani Group stocks surge after court panel finds no proof of price manipulation

India regulator ‘draws a blank’ in foreign links probe into Adani group

Two Adani Group firms to raise up to $2.57 billion from the market

Business

Almarai signs multiple agreements to localize jobs through training and recruitment programs

Almarai signed a cooperation memorandum with the Food Industries Polytechnic, the
Transport General Authority, and the Saudi Logistics Academy to localize jobs in the
food and beverages sector through training and rehabilitation programs ending in
employment. This came within the first international conference on the labor market,
organized by the Ministry of Human Resources and Social Development on 13 – 14
December 2023 at the King Abdulaziz Convention Center in Riyadh.

‘These agreements are part of Almarai’s corporate program for the social responsibility
to achieve localization in the food industry sector, which is one of the top priorities of the
comprehensive strategic plans in Almarai, especially since the company is one of the
largest working environments in the kingdom, with more than 9,000 Saudi employees,
including more than 900 Saudi female employees.”Fahad Aldrees, Chief Human
Resources Officer of Almarai, said.

He added that the agreements signed to train and qualify young people are part of the
integrated initiatives and training and rehabilitation programs for national human
resources in Almarai. He pointed out that the company provided about half a million
employee training hours during 2022, raising its retention rate to 90% during 2022.

It is worth mentioning that Almarai is the world’s largest vertically integrated dairy
company, and the largest food and beverage producer and distributor in the Middle
East. Almarai was ranked among LinkedIn’s top 15 Saudi companies for professional
career development for 2022.

Business

SEBA Bank rebrands to AMINA Bank and continues to write its success story

a fully licensed Swiss crypto bank, announced today its new brand identity: AMINA Bank AG. The group operates
globally from its regulated hubs in Zug, Abu Dhabi and Hong Kong, offering its clients traditional and crypto banking services.
SEBA Bank made history in 2019 by becoming one of the first FINMA-regulated institutions to provide crypto banking services. This rebrand marks a new chapter for the company, which has proudly been in operation for more than four years. AMINA Bank is inspired by the same trailblazing ambition to lead the way for its clients and to write its own future as a Swiss-
regulated crypto bank offering services to its traditional and crypto savvy clients around the globe. The name ‘AMINA’ stems from the term ‘transAMINAtion’, meaning transference of one compound to another. AMINA is a brand driven by perpetual change, bringing together the various ‘compounds’ of traditional, digital, and crypto banking to unlock new potential and
growth for our clients. This vision of change represents the transformation of our clients’ financial future. Franz Bergmueller, CEO of AMINA, said: “We are delighted to introduce the world to our new brand identity. While we say goodbye to the SEBA name, we remain forever proud of the achievements made by the group under the former brand. “Our brand signifies a new era in the company’s growth and strategy; we are a key player in crypto banking and are here to define the future of finance. With our client-focused approach, our years of traversing traditional and crypto finance, we offer a platform for investors to build
wealth safely and under the highest regulatory standards.” “We are grateful to be encouraged by our supportive and committed investors who have been very helpful, supporting the growth of the company. We thank our employees in all the regions
for their dedication and client focus. As we look forward to 2024, our ambition is to accelerate the growth of our strategic hubs in Switzerland, Hong Kong, and Abu Dhabi, and to continue our global expansion, building on all the successes we have laid down over the past years.” Current clients of AMINA Bank (formerly SEBA Bank) will be unaffected by the rebrand other than encountering the new name; all operations will be business as usual across the board. The branch office based in Abu Dhabi and the subsidiaries in Hong Kong and Singapore will subsequently apply for a name change to align with the head office in Zug.

Business

Uptime Appoints Mustapha Louni Chief Business Officer

Uptime Institute is pleased to announce the appointment of Mustapha Louni to the position of Chief Business Officer, a role specifically created to drive strategic leadership and client success. In this new role, Mr. Louni will assume responsibility for the global Uptime sales and marketing organizations and drive overall business value for all Uptime clients. He will retain his existing responsibilities overseeing operations in the Middle East, India, Africa, and the Asia Pacific regions. In this elevated capacity, Mr. Louni is poised to play a pivotal role in driving Uptime’s next phase of global expansion through strategic initiatives to enhance market awareness of the dramatically expanding global service lines and delivery capabilities of Uptime that uniquely support the global data center industry in its pursuit of ever higher performance through elevated availability, resiliency, sustainability, and cyber-security of digital infrastructure. Louni’s appointment renews and expands Uptime

Institute 39;s 30-year commitment to advancing excellence in the data center sector on a global scale. “Today we are experiencing the next phase of the one-time, planetary transformation from analog to digital. This unprecedented, once-in-a-generation growth in data center demand is primarily driven by continuing cloud adoption, the new promise of AI, and the demonstrable fact
that hybrid digital infrastructure is here to stay for the foreseeable future,” said Martin McCarthy, CEO, Uptime Institute. “These complex and nuanced market demands require a visionary talent like Mustapha Louni. He is someone who cannot only deftly manage specific aspects of the business but also remain ahead of accelerating changes and trends. He continues to earn client
trust and respect by timely delivery on demanding commitments while he also inspires and energizes colleagues and clients alike. I am delighted to announce Mr. Louni’s new position and know that he will continue to expand the impact that he has already brought to Uptime since his arrival.” In 2014, Mr. Louni joined the Uptime organization in the United Arab Emirates, leveraging his extensive experience from roles at Panduit and Schneider Electric in Paris and Dubai. As the company’s first commercial resource in the Middle East and Africa region, Mr. Louni played a pivotal role in expanding Uptime’s presence. Within a year, he successfully established what became and remains Uptime’s fastest growing regional office. Under his leadership, Uptime has
extended his impressive trajectory of growth in MEA to the Asia-Pacific regions, augmenting the Uptime workforce with dedicated team members spanning more than a dozen countries across these regions. A new Uptime office has been inaugurated in Riyadh, Kingdom of Saudi Arabia (KSA) this year, further fortifying the company’s ability to meet its commitment to sustained
growth and excellence and serve clients in critical, accelerating markets for digital infrastructure.

Uptime Institute began development of its proprietary and now globally recognized Tier Standards and its Tier Certifications 30 years ago to ensure that the mission critical computing needs of all organizations could be met with confidence and understood by executive management. Since that time, Uptime Tier Certification as well as other Uptime offerings including assessments and awards in digital infrastructure for ensuring business performance in areas of management and operations, risk and resilience, sustainability, and more recently cyber- security have gained global adoption. Uptime’s expanding success is based on delivering a
unique business service that is based upon unparalleled engineering excellence and technical mastery, while remaining vendor independent and technology agnostic.