In a major financial development, IndianOil-Adani Gas Pvt. Ltd., the joint venture between Indian Oil Corporation (IOC) and Adani Total Gas, is planning to raise Rs 1,378 crore ($161 million) through a structured convertible bond sale, sources familiar with the matter have revealed. The fundraising plan, set to unfold in four tranches via compulsorily convertible debentures (CCDs), is expected to be one of the largest hybrid instrument deals in India this year.
The CCDs, which will eventually be converted into equity, are being viewed as a strategic tool to secure capital while deferring equity dilution until market conditions are more favorable. This format has become increasingly popular in Asia amid rising interest rates and market volatility, offering issuers access to funds at lower coupon costs.
According to a source, IndianOil-Adani Gas may raise Rs 350 crore each through CCDs maturing in one, two, and three years, with the remaining Rs 328 crore through a four-year maturity. The interest rate will be market-determined. SBI Capital Markets Ltd. has been appointed as the arranger, with the deal potentially launching as early as this month.
If successful, this would mark the largest such offering since March 2025, when Adani Transmission’s ATL HVDC raised Rs 900 crore through a similar hybrid instrument, according to data compiled by Bloomberg.
The move aligns with India’s ambitious energy goals. The joint venture focuses on city gas distribution, supplying piped natural gas (PNG) to residential, industrial, and commercial customers, and compressed natural gas (CNG) for vehicles. The government aims to increase natural gas’s share in the national energy mix from 6% to 15% by 2030.
Despite a 14% drop in operating revenue in FY 2023–24, IndianOil-Adani Gas posted a 23% rise in net income, reaching Rs 44.5 crore. The company also earned a rating upgrade from Crisil Ratings in October to AA-/Stable, reflecting improved operational profitability and reduced project risk.
While the company has not issued an official statement, the proposed fundraising indicates strong investor interest in the energy and infrastructure sectors amid India’s shift toward cleaner fuels.
As global and domestic markets keep a close eye on this development, the IndianOil-Adani Gas bond sale could signal a renewed wave of capital raising through hybrid instruments in India’s energy sector.