Home Business Gautam Adani Group wants to raise at least $10 billion in new...

Gautam Adani Group wants to raise at least $10 billion in new debt

The move is aimed at reducing the overall burden of repayment of the port-to-power group.

Indian billionaire Gautam Adani’s group is looking to raise at least $10 billion in fresh debt next year as his group seeks to refinance its high-cost borrowings and fund future projects, according to people familiar with the plans.

Using a range of instruments, including foreign currency loans and green bonds, the Adani Group plans to raise up to $6 billion to swap its existing high-interest debt with low-cost borrowing and the rest for project financing. Posted, one of the people said, not asking to be identified as the information is private. People said that this effort may start in the current December quarter.

The move is aimed at easing the overall burden of repayment of the port-to-power group, which has come into limelight as Asia’s richest man has embarked on a series of ambitious acquisitions to diversify into sectors such as green energy, digital services and media. Follows the link.

Despite rising interest rates across the globe, the group is now confident of securing low-cost loans due to its large asset base, the people said. However, the timing of this fundraising effort may change according to global market conditions, he said.

A representative for Adani Group declined to comment on the fundraising plan.

People said raising the debt is different from the company’s plan to explore strategic equity investments in the group.

Indian newspaper Mint reported earlier this month that Adani and his family are in early talks with investors including Singapore-based GIC Pte and Temasek Holdings Pte to seek at least $10 billion for the group’s expansion into clean energy and ports. can be collected. The Adani Group has not publicly commented on the report.

Breakneck speed

The alarming pace of Adani’s expansion – the $6.5 billion acquisition of Indian units of Holcim Ltd in May that made the company the second largest producer of cement in the local market – has raised concerns over the group’s increased leverage ratio. While the company has consistently defended its debt levels as “healthy,” this effort to lighten borrowing costs underscores the need to avoid becoming perceived as being or over-expanded.

Adani Green Energy Ltd. saw strong demand for its first offering last September, receiving orders worth more than $3.5 billion for only a $750 million issuance. But the macroeconomic headwinds have since strengthened significantly.

Converting dollar debt is becoming costlier for Indian companies

According to the Bloomberg index of Indian dollar-denominated corporate and semi-sovereign bonds, dollar-denominated financing costs have increased over the past two months, including those of Adani companies. The relative cost of converting old debt to new is now the highest since the global financial crisis.

Yields on Adani bonds have risen this year as dollar borrowing costs are rising and are well above the issue level. This suggests that companies may still have to pay a premium for borrowing.

tough market

For example, the 2029 bond issued by Adani Ports now yields 9.4%, which is more than twice the issue rate. The yield on Adani Green’s 2024 bonds has tripled since selling, according to data compiled by Bloomberg show.

Raising low-cost debt in such a tough market will test the group’s ability and goodwill with bond investors and lenders. However, the flagship is already looking to test the waters.

According to a statement from CARE Ratings this week, Adani Enterprises Ltd. is planning the first bond sale of 10 billion rupees ($121 million) to individual investors, which have given an A+ score to the proposed issuance.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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