The Adani group raises $ 9 billion in the offshore bond market

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MUMBAI : Billionaire Gautam Adani’s group has become India’s largest offshore bond issuer with several group companies issuing bonds over the past five years to raise more than $ 9 billion from foreign investors.

The flagship company of the Adani group, Adani Ports and Special Economic Zone Ltd (APSEZ), alone has raised more than $ 5 billion during this period through nine bond issues and is the largest bond issuer. foreign private sector in India, according to data from financial market tracker Refinitv.

Only public lenders, such as Power Finance Corp. Ltd and Export Import Bank of India, have raised more than APSEZ, according to the data. The two raised $ 7 billion and $ 6 billion, respectively. The other large foreign bond issuers of the Adani Group include Adani Transmission Ltd and Adani Green Energy Ltd, which raised $ 2.29 billion and $ 1.61 billion, respectively.

JSW Steel is the second largest private sector foreign bond issuer, raising $ 3.87 billion. APSEZ, JSW Steel and Adani Transmission Ltd are the only non-financial services and non-state companies to feature in the list of India’s top 10 offshore issuers.

“The Adani group has been the most active and recurring issuer on the foreign bond market and the market is now very comfortable investing in an Adani paper. Therefore, we have also seen the Adani Group raise capital through very long-dated bonds such as 20 years, which offshore investors are generally only comfortable with with state-owned enterprises that have already raised funds at age 30, ”said an investment banker who advises companies on offshore bond offerings.

“Offshore capital has been available at lower rates given the liquidity of global markets and low interest rates. Since it (the Adani Group) has been one of the country’s fast growing conglomerates investing in capital-intensive infrastructure sectors, it has needed to increase its access to capital beyond banks and national markets, ”said the investment banker.

In July, APSEZ became the first infrastructure company to raise 20-year funds in international bond markets, issuing $ 750 million of 10.5-year, 20-year double-tranche unsecured bonds on the bonds. global capital markets. In August, the company’s external debt represented 70% of its overall debt, with debt in rupees representing the remaining 30%. The fact that Adani companies such as APSEZ and Adani Transmission have a high rating of BBB-, similar to India’s sovereign rating, has helped the company to tap into the liquidity of global debt markets.

It is not just the Adani group that has been active in foreign markets. With bond yields at historically low levels, fundraising activity in the offshore bond market is on track to likely surpass 2019’s record $ 21 billion.

“Indian corporate issuers have tapped the offshore US dollar bond markets and have raised more than $ 16.6 billion so far this year, the first nine-month period since the record began in 1980. In addition to the financial sector, a wider variety of companies across various industries have benefited from favorable market conditions thanks to the relatively low interest rate environment, greater liquidity in international markets and strong demand for investors for attractive returns, ”said Elaine Tan, senior analyst, Refinitiv, an LSEG company.

“Beyond diversification from domestic Indian bond markets, sustainability goals emerged as an important key driver. ESG bond issues accounted for 43% of proceeds from Indian corporate bonds denominated in US dollars, raising $ 7.1 billion. “

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