Adani's bond reentry: Signalling a strong comeback to the international market

Adani's bond reentry: Signalling a strong comeback to the international market

Gaurav Taparia
/ Categories: Trending, Mindshare

Capturing Adani group's remarkable bond issuance, demonstrating strong investor trust and global market resilience.

In a significant comeback move, India's Adani Group has successfully tapped into the global capital market with its first dollar bond since facing a short-seller attack last year. This move is being seen as a pivotal test for the conglomerate's credibility and access to international funds.

Demand Soars for Adani Green Energy's Bond

Adani Green Energy, a subsidiary of the Adani Group, priced a whopping USD 409 million 18-year bond after witnessing a staggering demand of nearly USD 3 billion. This remarkable demand allowed the company to offer the bonds at a yield of 6.7 per cent, which is 42.5 basis points lower than the initial proposal, indicating strong investor confidence and enthusiasm.

Positive Signals for the Adani Group

The success of Adani Green Energy's bond issue has paved the way for other companies within the Adani Group to consider similar bond offerings. The overwhelming demand for Adani's bonds primarily came from Asia, the Middle East, and Europe, signalling a widespread trust in Indian companies, especially in the infrastructure and renewable energy sectors.

Overcoming Adversity

The Adani Group faced a challenging period after a report by U.S. short seller Hindenburg Research last year alleged improper governance practices, stock manipulation, and the use of tax havens. However, the group has vehemently denied these allegations. In response to the selloff that followed, Adani executives and advisers embarked on a concerted effort to engage with investors globally, which seems to have borne fruit with the successful bond issuance.

Utilizing the Proceeds

The proceeds from the bond issuance will be utilized by Adani Green Energy to repay USD 500 million of senior unsecured notes that are due to mature in June. This strategic move not only helps in managing the company's debt profile but also demonstrates its commitment to financial prudence and stability.

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Strong Credit Ratings

The bonds issued by Adani Green Energy have been rated 'Ba1' by Moody's Investor Service and 'BBB-' by Fitch Ratings, indicating a moderate level of credit risk. These ratings, coupled with the overwhelming demand for the bonds, reflect a positive outlook for the Adani Group's future endeavours in the global capital market.

Conclusion

Adani Group's successful bond issuance marks a significant milestone in its journey, showcasing resilience, credibility, and investor confidence. The strong demand for its bonds, coupled with the company's proactive engagement with investors, highlights a promising future for the conglomerate in the global financial landscape.

Disclaimer: The article is for informational purposes only and not investment advice. 

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