Adani Energy has raised $500M via bonds
What's the story
Adani Energy Solutions, a unit of the Adani Group, has raised nearly $500 million via a bond privately placed with funds managed by Apollo Global Management. The 15-year private bonds were sold at an all-inclusive cost of around 8.5%. The company intends to use the proceeds to refinance its existing dollar debt, sources familiar with the matter told Bloomberg.
Shift
A strategic shift for Adani
The move marks a strategic shift for Adani, traditionally one of India's biggest issuers. The company is borrowing to fund its ambitious capital spending plans amid high borrowing costs in the public dollar bond market and potential legal risks from the US. The group has previously indicated plans to rely more on domestic markets and is increasingly turning to Japanese lenders for financing.
Market trends
Adani to stay away from public dollar bonds
The depreciation of the rupee has made dollar bond issuances more expensive, causing Indian issuers to slow down their sales. The Adani Group intends to stay away from public dollar bonds until prices stabilize and pending US matters are resolved. Apollo confirmed the deal, with partner Jamshid Ehsani noting that "India represents a compelling infrastructure market globally with strong economic growth and long-term demand for reliable power generation."
Partnership
Apollo previously invested in Adani's airport unit
Ehsani further added that Apollo is working with Adani Energy "to provide flexible, long-term capital that supports the resilience and growth of its platform." The Adani Group had previously tapped Apollo in June when its airport unit, the Mumbai International Airport Ltd, raised some $750 million from global investors. Before this, a group of investors including BlackRock bought bonds to fund Adani's acquisition of ITD Cementation India Ltd.