Adani Ports and Special Economic Zone (APSEZ) is charting a strategic move with plans to issue up to 10 billion rupees (approximately $120 million) in bonds through private placement. This initiative marks a significant development as it represents the company’s first foray into the local currency market in the past two years.
Sizing up the Offering
Insiders familiar with the matter have disclosed that the proposed bond issuance has a base size of 5 billion rupees, with an additional 5 billion rupees earmarked for oversubscription. This move aligns with APSEZ’s financial strategy, aiming to capitalize on market demand and potential investor interest.
Adani Enterprises’ Local-Currency Bond Prelude
Adani Ports’ parent company, Adani Enterprises Ltd., took the lead earlier in the year as the first among Gautam Adani’s conglomerates to issue local-currency bonds. This milestone was achieved despite facing scrutiny from US short seller Hindenburg Research in January. Denying the allegations, Adani Enterprises successfully raised 12.5 billion rupees in July through the bond issuance.
Historical Context: Adani Ports’ Bond History
The last time Adani Ports ventured into the local currency bond market was in 2021, as indicated by Bloomberg data. The current move suggests a strategic resurgence in utilizing this financing avenue for the company’s growth and capital requirements.
Board Approval and Financial Deployment
A recent exchange filing by Adani Ports disclosed that the company’s board has greenlit the issuance of up to 50 billion rupees in private placement debt. The proceeds from this debt offering are earmarked for critical purposes, including capital expenditure, refinancing existing liabilities, and meeting general corporate needs.
First Tranche Unveiled: 10 Billion Rupees
In line with the approved overall issuance, Adani Ports is gearing up to unveil the first tranche of bonds, targeting a substantial 10 billion rupees. The company is strategically positioning itself to leverage the financial markets for sustained growth, ensuring a robust capital structure for its operations.
Awaiting Clarifications
Despite attempts to reach out for comments, a spokesperson for Adani has not immediately responded to Bloomberg’s email. As the market anticipates further details, the company’s move to tap into the local currency bond market reflects a proactive and strategic financial approach in the ever-evolving landscape of economic opportunities.
