A unit of Indian billionaire Kumar Mangalam Birla's Aditya Birla Group has secured up to ₹24,000 crore ($2.5 billion) in loan commitments from at least four banks for its planned acquisition of Shell Plc's renewable energy assets in India. According to reports from The Hindu BusinessLine, ETBFSI, Outlook Business, and The Economic Times, this represents 70 per cent more than what the company was planning for, demonstrating strong appetite from Indian lenders for large corporate deals. The commitments underscore the strong appetite from Indian lenders for large corporate deals as they compete with global peers in financing big acquisitions in the country's $40 billion-plus deals market. The deal underscores rising lender appetite for large acquisition financing after the Reserve Bank of India began allowing local banks to finance corporate acquisitions from July 1 to spur the economy.
The conglomerate is seeking a ₹14,000 crore loan to finance the acquisition, with Axis Bank and State Bank of India each committing up to ₹7,000 crore, while Union Bank of India and Punjab National Bank have offered credit lines of around ₹5,000 crore apiece. As reported by ETBFSI, Outlook Business, and The Economic Times, the actual disbursements would be less than these ceilings, and the company is also in discussions with HDFC Bank Ltd. and Kotak Mahindra Bank Ltd. for additional credit lines. The commitments underscore the strong appetite from Indian lenders for large corporate deals as they compete with global peers in financing big acquisitions in the country's $40 billion-plus deals market.
According to The Hindu BusinessLine, ETBFSI, Outlook Business, and The Economic Times reports, Aditya Birla Renewables Ltd. will acquire 100 per cent of Solenergi Power Pvt. Ltd. to take control of its 5-gigawatt portfolio in the country. Solenergi owns Sprng Energy, which operates Shell's renewables assets in India. The acquisition loan carries interest rates ranging from 7.6 per cent to 7.7 per cent with tenors of 12 to 20 years, being taken by multiple special purpose vehicles backed by the company.
The loan commitments underscore strong appetite from Indian lenders for large corporate deals as they compete with global peers in financing big acquisitions in India's $40 billion-plus deals market. As reported by The Hindu BusinessLine, The Economic Times, and multiple sources, the Reserve Bank of India began allowing local banks to finance corporate acquisitions from July 1 to spur the economy. Loans extended by Indian banks grew 18.3 per cent to ₹220 lakh crore between January to August 15, outpacing the 14.7 per cent increase in deposits, according to central bank data. India's banking sector is likely to see a flood of liquidity after the country raised a record $127 billion from its vast diaspora through an aggressive push by lenders, which is expected to drive down borrowing costs.
