India’s Top LNG Importer Petronet Seeks ₹12,000 Crore ($1.4B) Local Loan

Petronet LNG Ltd, India’s largest importer of liquefied natural gas (LNG), is in advanced talks to raise a ₹12 crore ($1.4 billion) domestic loan to fund two large-scale projects: a petrochemical complex at Dahej and a new 5 MTPA LNG terminal at Gopalpur. 

The company has engaged SBI Capital Markets as a financial advisor for this significant financing round.

Banks like Axis Bank, State Bank of India, and Union Bank of India are reportedly gauging interest, either individually or in consortium form.

Funding Allocation & Project Funding (Estimated)
 

Why This Loan Matters?
 

1. Scale & Size
   With credit growth in India contracting to 9.5% as of June 27—the slowest since March 2022—the proposed facility stands out as one of the largest rupee-denominated loans this year.
    
2. Prudent Financing Approach
   With a 10+ year tenor expected and an interest cost potentially below SBI’s 7.95% MCLR, the funding appears strategically tailored for capital-intensive, long-gestation infrastructure.
    
3. Strategic Diversification
   The petchem plant is envisioned to build higher-margin revenue streams, complementing Petronet’s core LNG regasification operations.

Key Lending Partners & Strategic Advisors
 

Industry Outlook & Implications
 

• Muted Loan Activity
  India’s bank lending slowed sharply, highlighting the significance of large-ticket financing in such a cautious environment.
   
• Energy Sector Momentum
  With a growing focus on cleaner energy and petrochemical diversification, Petronet’s twin expansions are aligned with India’s commitment to enhancing energy infrastructure.
   
• Credit Market Test
  The ultimate pricing and tenor of this facility could serve as a market gauge, particularly on the appetite for long-tenor infrastructure financing.

Conclusion

Petronet LNG's move to secure a ₹12 crore loan marks a major infrastructure milestone, backed by major public and private banks and guided by SBI Cap Markets. By investing in both petrochemicals and coastal LNG capacity, Petronet is taking its business beyond regasification to capture higher-margin opportunities.

Approval and execution of the loan would signal affirmation of the energy sector’s role in India’s growth story, especially during a period of subdued credit activity.
 

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