Adani Group to hit global bond market, looks to raise over $1 bn from investors
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The Adani Group is looking to raise $1-1.5 billion from investors and is tapping the global debt market with its maiden dollar bond issuance for Adani Ports and SEZ (APSEZ).
Economic Times reported that investment banks like Standard Chartered, Bank of America Merrill Lynch, Citi, Barclays and SBI Capital have been mandated to manage the issue and some more are expected to join in. The company is seeking investment grade ratings from international rating agencies.
Though the tenure and quantum of the bonds will be finalised only when the ratings come in, but sources told the financial daily that it would be a 5-10 year paper. ET reported the principal rationale for the issue is to swap the company's high cost rupee borrowings with cheaper dollar funding and for capex.
Adani Group’s FY15 net debt (unaudited) stood at Rs 15,155 crore, up 30.45% from FY13. ET stated that this issue may be followed by another in the coming months asGautam Adani himself has gone on record to say two of his group companies-APSEZ and the newly created Adani Transmission - are looking to mop up Rs 25,000 crore from global markets. With APSEZ alone having plans to raise up to Rs 15,000 crore (around $2.5 billion), most expect a follow-on offer soon.
“Long-term investors like pension funds and insurers, who believe in long-term India growth story may invest in these dollar-denominated offshore bonds of domestic infrastructure companies," Sidharth Rath, President of Treasury & Business Banking at Axis Bank told ET, adding, “The cost of borrowing will depend on how the issuers mange their forex risk."
An investment banker with a large European bank, on the condition of anonymity, said that even though US bond yields were rising, Indian issuers with investment grade still obtained better rates. “The recent Bharti Airtel issue proved this. All agree that the infrastructure sector will gradually pick up," said the investment banker.
Adani Ports and SEZ is the largest multi-port operator of India. It acquiredDharma Port in 2014 for Rs 5,500 crore, the largest deal in the sector.
ET said the company has been expanding its footprint through greenfield projects and acquisitions, following what is known as the 'string of pearls' strategy.
Post Dharma acquisition, company watchers said expanding in the east coast has been its key focus. The financial daily reported that Adani has also emerged as the sole bidder for a greenfield port in Kerala. The multi-cargo ports of Dhamra and Mundra are the second hubs for Adani.
"They are clearly looking to capture the coal traffic from Indonesia and Australia where they have mining operations. At the same time, they are also eying freight traffic from Bangladesh and Myanmar to emerge as a powerhouse in the Bay of Bengal. After Singapore, they want to be the next biggest hub in the South Asia," a long-time Adani watcher told ET.
(Image: Reuters)
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Economic Times reported that investment banks like Standard Chartered, Bank of America Merrill Lynch, Citi, Barclays and SBI Capital have been mandated to manage the issue and some more are expected to join in. The company is seeking investment grade ratings from international rating agencies.
Though the tenure and quantum of the bonds will be finalised only when the ratings come in, but sources told the financial daily that it would be a 5-10 year paper. ET reported the principal rationale for the issue is to swap the company's high cost rupee borrowings with cheaper dollar funding and for capex.
Adani Group’s FY15 net debt (unaudited) stood at Rs 15,155 crore, up 30.45% from FY13. ET stated that this issue may be followed by another in the coming months as
“Long-term investors like pension funds and insurers, who believe in long-term India growth story may invest in these dollar-denominated offshore bonds of domestic infrastructure companies," Sidharth Rath, President of Treasury & Business Banking at Axis Bank told ET, adding, “The cost of borrowing will depend on how the issuers mange their forex risk."
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Adani Ports and SEZ is the largest multi-port operator of India. It acquired
ET said the company has been expanding its footprint through greenfield projects and acquisitions, following what is known as the 'string of pearls' strategy.
Post Dharma acquisition, company watchers said expanding in the east coast has been its key focus. The financial daily reported that Adani has also emerged as the sole bidder for a greenfield port in Kerala. The multi-cargo ports of Dhamra and Mundra are the second hubs for Adani.
"They are clearly looking to capture the coal traffic from Indonesia and Australia where they have mining operations. At the same time, they are also eying freight traffic from Bangladesh and Myanmar to emerge as a powerhouse in the Bay of Bengal. After Singapore, they want to be the next biggest hub in the South Asia," a long-time Adani watcher told ET.
(Image: Reuters)
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