Power Play: Adani Electricity Mumbai Cuts $49.5 Million in Bonds, Sparks Investor Confidence

Image Source: Saur Energy International

Adani Electricity Mumbai Ltd. (AEML), a subsidiary of Adani Energy Solutions, strengthened its balance sheet further by undertaking an open market purchase of $49.5 million of its 3.949% Senior Secured Notes due 2030. The transaction, carried out on solely internal cash flows, reduces the outstanding principal on these USD-denominated bonds to $830.5 million. The buyback is a follow-up to a successful $120 million tender offer undertaken in November 2023, taking total debt reduction on these notes to close to $170 million over the last year.

This ongoing management of the liability is a part of the capital management strategy of AEML, with the primary goal of lowering leverage, enhancing financial flexibility, and to help support investor confidence. The company has determined that it can extend such market activity in the future, subject to market conditions.

Key Highlights:

$49.5 million open market acquisition of 3.949% Senior Secured Notes due 2030 funded wholly from AEML's internal cash flows generated.
Outstanding principal brought down to $830.5 million from the initial $1 billion floated in February 2020.
Follows a $120 million tender offer that closed in November 2023, in what was an aggressive debt management action.
Enhances the financials and shows robust cash generation, in line with the Adani Group's strategy of enhancing financial matrices and reducing leverage.
Additional commitment to liability management: AEML can undertake additional buybacks or similar measures based on the market.
Operational excellence: AEML continues to invest in Mumbai's power infrastructure with large projects in the pipeline and growing share of renewable energy in its basket.

Industry accolades: Adani Electricity Mumbai ranks No. 1 power utility in India and has diversified its renewable energy portfolio and reduced the level of greenhouse gas emissions.

This series of buybacks not only reduces the debt burden of AEML but also shows that the company believes in the cash flows of its operations as much as it believes in the judicious management of funds, reaffirming its status as a market-leader private power utility in India.

Source: Economic Times, Business Standard, Adani Group Media Releases