Adani Gas Shares Rise 6% After Securing $375 Million Funding for City Gas Distribution Expansion

Shares of Adani Total Gas jumped more than 6% on September 23 after international lenders announced a $375 million funding package. The joint venture between India's Adani Group and France's TotalEnergies stressed that the funding package is the largest ever in the city gas distribution (CGD) sector.

By 11:15 AM IST on Monday, 23rd September, Adani Total Gas shares were trading at ₹835 on the NSE, surging up 5.8%. In the past year, the stock has gained a staggering 32% while Nifty added 27%. However, the stock has fallen 16% so far this year as the Nifty index rises 19%.

This funding structure allows the company to raise future funds based on its business plan. Funding, in addition according to the company, will hasten the expansion of the infrastructure plans of the company, The first commitment sum stands at $315 million and can be risen on a need basis according to the future goals of the company, the filing added.

Adani Gas's expansion of its CGD network across 13 states into 34 geographic areas will be supplemented by a financing deal supported by prominent international banks including BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.

This expansion will benefit around 14% of India's population and in turn could serve more than 200 million people. According to the company, it aims at strengthening piped natural gas and compressed natural gas availability, contributing to a cleaner and gas-based economy for the country.

Adani Gas CFO Parag Parikh said, "The fact that international lenders are coming in at this stage reflects how important city gas distribution is in the journey to cleaner fuels. The financial package will support our growth and hence create long-term shareholder value."

Borrower-side counsel was Latham & Watkins LLP and Saraf & Partners. Linklaters advised the lenders, teaming up with Cyril Amarchand Mangaldas.

Established in the year 2005 and rebranded in 2021, Adani Total Gas Limited is an Indian city gas distribution company that provides natural gas for both residential, industrial, and commercial customers. It also sells compressed natural gas as a fuel for vehicles and is entering the business of electric vehicle charging and processing biogas.

ATGL has its operations spread across 52 geographies, stretching from different states like Gujarat, Haryana, and Karnataka. As a result of its relentless pursuit for sustainability, ATGL has undertaken multiple eco-friendly projects, which include the urban greening and tree plantation programs.