Adani Ports and Special Economic Zone (SEZ) launched an off-shore bond offering on July 29, raising $750 million, in what media reports described as the third-largest such deal by an Indian company since the coronavirus pandemic disrupted global economy in March.
Owned by billionaire Gautam Adani, Adani Ports is raising the capital through seven-year bonds, maturing in 2027, at a rate of 4.2 percent, Mint reported. Banks advising Adani Ports include Citigroup, Barclays and Bank of America.
The amount will be used to repay loans of Adani Ports and its subsidiaries. The move comes after the company's board approved an off-shore bond capital raise of up to $1.25 billion earlier in July.
Experts say that offshore bonds from Indian companies will remain muted. Rural Electrification Corporation (REC) in May and UPL in June raised $500 million each, while SB Energy withdrew its $600-million bond offer in July.
“… the market isn’t there yet in terms of its evolution for non-investment grade (non-IG) issuers from India," Shantanu Sahai, managing director and head of debt at Nomura India told the newspaper.
“The markets had started to open up secularly since early June, which had led to the hope that HY (high-yield) issuers would be able to access it in July or August, but the opening has stalled while the market moves sideways in the past two-three weeks. The only HY issuance that has been seen has been from China," he added.
Trade tensions between the United State and China and growing coronavirus infections across Asia had turned investors cautious, Sahai said.