A consortium of banks led by the State Bank of India (SBI) has agreed to finance a significant part of the Adani Group's Rs 34,000-crore polyvinyl chloride (PVC) project in Mundra, according to a report by The Hindu Businessline (BL). 

With this financing, the PVC project is set to achieve financial closure by the middle of August. 

The project’s first phase funding will be taken by the public sector banks (PSBs) which will pick up the bulk of the tab of around Rs 14,500 crore. The remaining amount will be financed by private lenders, the report said.

The project is being executed by a subsidiary of Adani Enterprises, Mundra Petrochem which has set its eyes on installing the plant with an annual capacity of one million tonnes in the first phase at a total cost of $2.5 million. The plan is to double the capacity in the second phase after the first phase is commissioned by 2025-26, the report said.

The coal-to-PVC project of the Adani Group is an important part of the group's ambitious plans to develop a petrochemical cluster at Mundra and Central. The group plans to be a major player with a significant share in the segment.

As things stand, domestic lenders including government banks and private banks have only 16% exposure to the group. More than one-third of the group's loans have been sourced through bonds from global financial institutions, the report added.

Incidentally, this is the first major financing deal after the Hindenburg report in January came down heavily on the Adani Group. The report damaged the group's plan to raise Rs 20,000 crore via a follow-on public offering and dealt a major blow to its expansion plans in the short run.

The conglomerate lost over Rs 12 lakh crore in market value after the US-based short-seller published allegations of the group engaging in stock market manipulation and accounting fraud. The Gautam Adani-led group has since denied any wrongdoing.