Adani Ports, Adani Airport Holdings in talks to raise upto ₹1,500 crore each from bond market: Report

Adani Ports, Adani Airport Holdings in talks to raise upto ₹1,500 crore each from bond market: Report

Adani Ports and Special Economic Zone (SEZ) and Adani Airport Holdings, two companies under the Adani Group, are reportedly in discussions with merchant bankers to raise funds through local currency bonds. According to a report by Reuters, both companies are aiming to raise up to ₹1,500 crore each through these bonds.

Adani Ports and SEZ is a leading port operator and logistics company in India, while Adani Airport Holdings focuses on the development and operation of airports. The move to raise funds through local currency bonds suggests that the companies are exploring avenues to secure capital for their operations and expansion plans.

Local currency bonds, also known as rupee-denominated bonds, allow companies to raise funds domestically in Indian Rupees rather than foreign currencies. This can provide certain advantages, such as reducing currency risk and dependency on international markets. The proceeds from these bonds can be used for various purposes, including financing infrastructure projects, refinancing existing debt, and supporting business growth initiatives.

The decision to raise funds through local currency bonds reflects the Adani Group’s strategy to diversify its funding sources and tap into the domestic market’s potential. It also aligns with the broader trend of companies seeking alternative funding channels amid changing market dynamics and regulatory environments.

The move by Adani Ports and Special Economic Zone (SEZ) and Adani Airport Holdings to raise funds through local currency bonds is part of the Adani Group’s broader plan to raise capital. The conglomerate, led by billionaire Gautam Adani, aims to raise a total of ₹10,000 crore in the fiscal year 2023-24. These two companies are expected to be the first within the Adani Group to tap the bond market as a means to achieve this fundraising target.

The bond issuance would allow Adani Ports and SEZ and Adani Airport Holdings to access funds from the Indian market while taking advantage of favorable market conditions and investor interest. The Adani Group’s diverse business interests, ranging from ports and logistics to airports and energy, indicate the potential for various growth opportunities that may require additional funding.

By raising funds through local currency bonds, the Adani Group can strengthen its financial position and support its expansion plans. This approach aligns with the group’s efforts to tap different sources of financing and optimize its capital structure for sustained growth and development across its diverse businesses.

The move to tap the bond market also reflects the ongoing trend of companies seeking to diversify their funding avenues and capitalize on the opportunities available in the domestic market. This strategy provides flexibility in raising capital, optimizing costs, and supporting the group’s strategic initiatives.

Adani Ports and Special Economic Zone (SEZ) and Adani Airport Holdings are reportedly considering issuing bonds with tenures of up to five years, with the potential issuance scheduled for as early as September, according to sources familiar with the matter. This move is part of the Adani Group’s strategy to gauge investor interest and assess the market’s appetite for their securities before proceeding with the issuance.

In addition to Adani Ports and SEZ and Adani Airport Holdings, other companies within the Adani Group, such as Adani Enterprises and Adani Electricity Mumbai, are also exploring the possibility of issuing debt instruments to raise capital. The Adani Group’s approach seems to be centered around observing market conditions and investor sentiment to ensure that there is sufficient demand for their offerings.

The Adani Group’s willingness to evaluate investor interest and market dynamics before proceeding with bond issuances reflects a prudent approach to fundraising. By carefully assessing demand and ensuring a favorable market environment, the group aims to optimize its financing strategy and secure competitive terms for its debt issuances.

Overall, the Adani Group’s efforts to diversify its funding sources and explore various options for capital raising indicate a proactive approach to managing its financial needs and supporting its growth plans across different business verticals.

Adani Ports and Special Economic Zone (SEZ) and Adani Airport Holdings are reportedly considering issuing bonds with tenures of up to five years, with the potential issuance scheduled for as early as September, according to sources familiar with the matter.

However, the finalization of these plans is contingent upon the findings of an ongoing investigation by the Securities and Exchange Board of India (SEBI) into allegations made by US-based short-seller Hindenburg Research. The regulatory report is expected to be submitted by Monday, following which the Adani Group’s fundraising plans may be solidified.

The Adani Group’s fundraising initiatives mark their return to the local bond markets after a hiatus that began in January. The hiatus was prompted by a report released by Hindenburg Research, which raised concerns about the corporate governance practices within the Adani Group. The report led to a significant decline in Adani Group stocks as investors reacted to the allegations.

Despite these allegations, the Adani Group has maintained its stance, occasionally refuting the accusations made by Hindenburg Research. This situation has put a spotlight on the regulatory scrutiny and investor sentiment surrounding the group. The ongoing SEBI investigation is expected to shed more light on the allegations and provide insights into the governance practices of the conglomerate.

The Adani Group’s cautious approach to returning to the bond market indicates their commitment to ensuring that the market environment is conducive and investor confidence is restored before proceeding with any fundraising initiatives. The evaluation of investor sentiment and the regulatory landscape underscores their intention to adopt a prudent and well-informed approach to capital raising.

Once the SEBI report is released, the Adani Group may engage in more substantive discussions regarding their fundraising plans. By considering market conditions, regulatory developments, and investor sentiment, the group aims to chart a strategic path forward for their fundraising endeavors. This demonstrates a proactive approach to addressing concerns and ensuring transparency and stability in their financial operations.