Adani Group to consider privately placed bond offerings for 3 subsidiaries

Indian conglomerate Adani Group is in talks with potential investors as it considers offering privately placed bonds for at least three of its group companies, people familiar with the matter said.

If it moved ahead with any offering and was able to secure investors, it could be the first debt issuance for Adani since shortseller Hindenburg Research alleged fraud and stock manipulation last month, claims that the group has vigorously disputed. 

The plan under consideration, initially broached late last year, is to try to raise a total of as much as $1.5 billion through note sales by Adani Green Energy Ltd., Adani Transmission Ltd. and Adani Ports & Special Economic Zone Ltd, according to the people. The firms will consider offering bonds with tenors up to 20 years, with the first potential deal targeted for April-May, the people said, asking not to be identified speaking about a private matter.

Adani Group was once one of India’s biggest sources of dollar bond issuance, but a spike in yields after the Hindenburg report has stoked concerns among some investors and analysts that at least for now debt financing costs would be prohibitively expensive for new bond deals.

An Adani Group spokesperson declined to comment when asked about any plans for privately placed bond deals.

Adani dollar notes have pared some losses since the initial selloff sparked by the Hindenburg allegations, with many now trading in the 70 cent range. The rebound also came after banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. told clients that bonds related to Adani’s business empire offered value in part due to the strength of certain underlying assets. 

But in a sign of how high financing costs could still be, the yield on Adani Green’s bond due in September 2024 is indicated at about 24%.