The Adani group has embarked on a series of overseas roadshows for bondholders to bolster investor confidence around its businesses before fresh bond sales, two people close to the development said, requesting anonymity.
Signalling the group’s return to the international bond markets after the Hindenburg crisis last year, Adani Green Energy Ltd (AGEL) said on Wednesday that it is looking to raise $409 million via dollar-denominated bonds with a door-to-door tenor of 18 years. The proceeds from the sale will be used to refinance the $500 million, 6.25% senior secured notes due in 2024, sold on June 10, 2019.
The roadshows, according to the people cited above, are part of efforts to reassure investors of its ability to service its debt obligations through prudent financial planning, operational efficiency, and strategic asset monetization initiatives while also addressing any lingering doubts stemming from the Hindenburg crisis, they said. “Led by key executives and financial advisors, the roadshows aim to address investor concerns by providing clarity on the group’s debt management strategies, liquidity position, and repayment schedules,” said the first person cited above.
During these engagements, the Adani Group is expected to outline its expansion plans across various verticals, including renewable energy, ports, airports, and infrastructure. With India’s burgeoning infrastructure requirements and the government’s emphasis on initiatives such as the adoption of renewable energy and port-led development, the group aims to capitalize on emerging opportunities and solidify its position as a key player in the global market, they said. “The group’s senior management have recently met investors in London and plan to hold similar interactions with investors in continental Europe, the US and Canada, the Middle East and Asia,” said a second person, a banker.
“These roadshows, characterized by presentations and interactive sessions, are strategically designed to engage overseas stakeholders and provide insights into the group’s operational performance, financial stability, and growth prospects,” said the banker. The group has $1.9 billion in foreign currency bonds due in 2024. It has settled a substantial portion of its outstanding maturities.
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The group has told investors through regulatory filings that it is working to create a liquidity pool of cash and cash equivalents to repay $750 million of Adani Green’s holding company bonds sold in 2019 and maturing in September next year. The group has also committed to pay in cash a $650 million bond tranche of Adani Ports and Special Economic Zones due by July, of which it has already paid $325 million this year. Adani’s top bondholders include Blackrock, PIMCO, Fidelity and MetLife.
Ambitious plans
“Going by the total investments planned by the group in the next five to seven years, its overseas borrowings may go up significantly,” the first person added.
Notably, in various announcements since January, the group has said it will spend close to Rs 2.5 lakh crore across businesses. For instance, it is building the world’s largest green energy park, covering 725 sq km in Gujarat’s Rann of Kutch desert. It will produce 30 gigawatts of electricity from solar energy and set up an integrated renewable energy manufacturing ecosystem for solar and wind.
In Telangana, the group has committed to investing Rs 12,400 crore in the next few years, including a Rs 5,000 crore investment for setting up two pumped storage projects of 1,350 MW and a data centre with a total capacity of 100 MW.
The group has said it will invest $100 billion in green energy over the next decade to supply power to its ports, power, and cement operations as it aims to become a net zero emitter by 2050.
According to the group’s latest corporate filings, it has a total outstanding debt of close to $9 billion in overseas bonds with maturities extending till 2041. The group last raised $750 million in April 2022 for Mumbai International Airport Ltd, a unit of Adani Airports Holdings Ltd.
Asia accounts for 34 percent of total bond borrowings, followed by the US and Canada at 31 percent, Europe at 31 percent and the Middle East at 4 percent.
As of September 30, the group had total assets of Rs 4.48 lakh crore. The combined market cap of 10 Adani companies has more than doubled in the past year to Rs 16.22 lakh crore.
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