$409 million bond offered by Adani since Hindenberg crisis in 2023

18 year note at initial price offered by Adani Green Energy Ltd. and other enterprises of the conglomerate in 7.125% range

The Adani group marketed the $409 million bond , which will be the conglomerate’s first dollar bill post the Hindenburg research in 2023. The Hindenburg probe from the previous year, which implicated financial fraudulent conduct, has raised serious concerns about the capital-raising activities of the Indian conglomerate. The new foreign bond points to signs that suggest a recovery in investor confidence.

The Conglomerate’s solar energy enterprise Adani Green Energy Ltd, alongside other associated firms have proposed the 18 year note at an initial price in 7.125% area, a source part of the association confirmed.

Adani declared earlier this week that it has begun discussions for the intended transaction with major banks – Deutsche Bank AG, Barclays Plc and Standard Chartered among the few who have begun coordinating a sequence of fixed-income investor meetings across Asia, the Middle East, Europe, and the United States which commenced from February 28.

Adani & the GQG Partners LLC

After gradually increasing its holdings in most Adani Group stocks over the past year, GQG Partners, a fund managed by investor Rajiv Jain, has become the group’s largest investor with about $9 billion worth of shares. This fresh equity backing, along with Adani’s successful refinancing of $3.5 billion in debt for its cement acquisition, helped the company’s securities recover last year. LIC, the largest institutional investor in India, has reduced its holdings in three Adani Group companies – Adani Enterprises, Adani Energy Solutions, and Adani Ports and Special Economic Zone – over the last six months, even as GQG Partners increased its stake in most group companies during the same period, according to latest shareholding data.

Bloomberg Intelligence’s take

Investors in Adani Green’s new bonds might not see a significant yield advantage compared to the company’s existing debt. This is because early indications suggest an interest rate around 7.125%, which could be similar to existing Adani Renewable bonds. Despite this, the new bonds offer a longer maturity, reducing the risk of needing to refinance them soon. Fitch Ratings expects to give these bonds a BBB- rating, which is higher than the debt they are replacing. The money raised will be used to pay off $500 million in maturing notes. Overall, the new bonds offer stability with a longer lifespan but may not provide a substantial increase in returns.

Following the significant decline in Adani Group’s stock price in early 2023, some major asset managers saw an opportunity and increased their holdings of Adani’s dollar-denominated bonds. Conversely, Singapore’s state-owned investment firm Temasek chose to completely exit its position in Adani bonds.

The resignation of the auditor for the group’s ports business in 2023 raised concerns about its accounting practices. This adds to ongoing questions about the group’s relationship with Prime Minister Narendra Modi and its use of offshore firms.

As of Monday midday in Asia, orderbooks for the new bond issuance by Adani Group had surpassed $1 billion, according to a source familiar with the matter. This comes despite the ongoing controversy surrounding the conglomerate, following accusations of fraud and stock manipulation levelled against it by Hindenburg Research in a report published in early 2023. Adani Group, led by billionaire Gautam Adani and encompassing a diverse range of businesses from ports and airports to solar energy, has consistently denied these claims.