December 15, 2023
New Delhi, India
In a strategic move, Adani Ports and Special Economic Zone is set to raise ₹10 billion ($120 million) through a bond sale, marking its first local currency offering since 2021. This decision comes on the heels of a successful bond issuance by the Adani Group flagship, Adani Enterprises Ltd., earlier this year.
Confidence in Market Conditions
The planned bond sale is a significant indicator of Adani Ports‘ confidence in current market conditions. The company is opting for a phased approach, with a base size of ₹5 billion and an additional ₹5 billion option for oversubscription, showcasing flexibility in responding to investor demand.
Financial Strategy Amidst Controversy
Despite facing allegations from US short seller Hindenburg Research in January, Adani Enterprises Ltd. successfully raised ₹12.5 billion in July. This suggests that the market may not be significantly swayed by the controversy, as the Adani Group denies the allegations.
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Utilizing Local Currency for Growth
Adani Ports’ return to local currency bonds aligns with its broader financial strategy. The funds raised, as approved by the company’s board, will be allocated for capital expenditure, refinancing existing liabilities, and general corporate purposes, indicating a move to bolster its financial position and potentially fund new projects.
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Board Approval for Larger Issuance
An exchange filing earlier this week revealed that Adani Ports’ board had approved the issuance of up to ₹50 billion in private placement debt. The planned ₹10 billion bond sale represents the first tranche of this larger approved issuance, indicating a phased approach to raising capital.
Looking Ahead
While a spokesperson for Adani did not immediately respond to requests for comment, the company’s move to re-enter the bond market in local currency underscores its strategic financial planning. The success of this bond sale will likely play a crucial role in shaping Adani Ports‘ future growth and development initiatives.
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