Gautam Adani’s group has become the biggest issuer of offshore bonds from India with multiple group companies issuing bonds in the past five years to raise more than $9 billion from foreign investors
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Billionaire Gautam Adani’s group has become the biggest issuer of offshore bonds from India with multiple group companies issuing bonds in the past five years to raise more than $9 billion from foreign investors.
The Adani group’s flagship company Adani Ports and Special Economic Zone Ltd (APSEZ) alone has raised over $5 billion during this period across nine bond issuances and is the biggest private sector issuer of foreign bonds from India, according to data from financial markets tracker Refinitv.
Only state-owned lenders, such as Power Finance Corp. Ltd and Export Import Bank of India, have raised more than APSEZ, the data showed. The two have raised $7 billion and $6 billion, respectively. Other major overseas bond issuers from 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 biggest private sector issuer of overseas bonds raising $3.87 billion. APSEZ, JSW Steel and Adani Transmission Ltd are the only non-financial services and non state-owned enterprises to feature in the list of top 10 offshore issuers from India.
“The Adani Group has been the most active and repeat issuer in the overseas bond market and the market is now very comfortable investing in an Adani paper. Hence, we have also seen the Adani Group raising capital through very long dated bonds such as 20 years, for which generally offshore investors are comfortable only with state-owned enterprises that have previously raised 30-year money," said a investment banker who advises companies on offshore bond offerings.
“Offshore capital has been available at cheaper rates given the liquidity in the global markets and low interest rates. Given that it (the Adani Group) has been one of fast-growing conglomerates in the country investing in capital-intensive infra sectors, it has had the need to increase its access to capital beyond domestic banks and markets," the investment banker said.
In July, APSEZ became the first infra company to raise 20-year money from international bond markets, issuing $750 million bonds of dual tranche 10.5-year and 20-year unsecured bonds in global capital markets. As of August, the firm’s foreign debt comprised 70% of its overall debt with rupee debt accounting for the remaining 30%. The fact that Adani firms such as APSEZ and Adani Transmission have a high rating of BBB-, similar to India’s sovereign rating, has helped the company tap the liquidity in global debt markets.
It is not just the Adani group that has been active in the overseas markets. With bond yields at a historical low, fundraising activity in the offshore bond market is on its way to likely surpass the $21 billion record of 2019.
“Indian corporate issuers tapped the offshore US dollar bond markets and raised more than $16.6 billion so far this year, the highest first nine-month period by proceeds since records began in 1980. Aside from the financials sector, a wider variety of companies from various industries took advantage of the favourable market conditions driven by the relatively low interest rate environment, greater liquidity in international markets, and strong investor demand for attractive yields," said Elaine Tan, senior analyst, Refinitiv, an LSEG Business.
“Beyond diversification from India’s domestic bond markets, sustainability-themed targets emerged as a significant key driver. ESG-related bond issuance accounted for 43% of the Indian corporate US dollar-denominated bond proceeds, raising $7.1 billion in proceeds."
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