Overseas loans' share in total Adani group debt portfolio declines

Global bond investors keen to invest in Indian infrastructure sector

The share of foreign loans in total Adani group debt portfolio dropped to 61 per cent by September 2023 from 63 per cent as of March 2023, as the group repaid part of its foreign loans and refinanced part of older loans.
 

The share of Indian lenders, on the other hand, rose to 39 per cent in the total debt pie in September 2023 from 37 per cent in March after a report by US-based short seller Hindenburg Research in January last year, which led to volatility in the share prices of group companies. The group’s total debt remained static at Rs 2.26 trillion in the same period. The group, which recently met investors via roadshows in key cities across the world, has attracted investments in bonds from investors in the secondary market such as BlackRock, AIA, PIMCO, Fidelity, Apollo, MetLife, and Goldman Sachs, among other investors, according to a presentation made to investors.
 

At present, Adani Ports and Special Economic Zone has the highest foreign debt with $4 billion raised from bond investors, followed by $2.5 billion raised by Adani Energy Solutions and Adani Green at $1.57 billion, the presentation showed. The airport business has also raised $750 million as foreign bonds.
 

Investment in Adani Group bonds in the secondary market has increased after investors identified the infrastructure sector as a theme for investment in India, a positive outcome from the Supreme Court on Hindenburg Research investigations, 

and recent upgrades by global rating firms.
 

A spokesperson for Adani Group declined to comment.

 

Group executives plan to raise funds worth $2.6 billion by selling stakes in the airport and green hydrogen business. The transactions would be announced soon, said a banker close to the transaction.
 

“The bonds have recovered as the shares and investors have gained in the past few months, and hence the renewed interest in new bonds,” said a banker close to the transaction.
 

On February 20, Fitch Ratings affirmed the ‘BBB-’ rating on the $400 million senior secured notes issued by Adani Energy Solutions, (formerly known as Adani Transmission), with a ‘stable’ outlook. The group is expected to end 2023-24 with earnings before interest, tax, depreciation, and amortisation of Rs 80,000 crore.
 

Earlier, Moody’s and S&P had reaffirmed the ratings for all issuers within Adani Group companies. The rating reflects the rating affirmation of eight issuers and the restoration of the ‘stable’ outlook of five entities by both rating agencies.
 

While giving a ‘stable’ outlook, Moody’s said the group has completed several debt transactions, including refinancing as well as obtaining new loan facilities, “demonstrating its continued access to debt capital at a reasonable cost”.
 

At the same time, Moody’s said several high-profile equity transactions by large institutional and strategic investors, such as GQG and Qatar Investment Authority, also demonstrated the group’s continued equity market access.