The India-headquartered Adani Group, which includes Adani Ports & SEZ, is reportedly engaged in raising US$10 billion in lower cost green bonds.
At the same it has launched equity fund raising plans as part of what it calls its “systemic capital management programme,” which has been in place since 2019 and under which QIA and Abu Dhabi-based International Holding Co have previously invested in Adani.
It is interesting to speculate where this search for further investment in its group companies will lead – an initiative which it says is quite separate from its debt raising plans. Discussions are being held in conjunction with sovereign wealth funds including Singapore’s GIC Pte and Temasek Holdings Pte, as well as a range of other parties such as the Abu Dhabi Investment Authority, the Qatar Investment Authority and pension funds like the Canada Plan Investment Board.
The big question is, however, will this search for funding lead to investment in Adani’s ports division by a global terminal operator? As previously noted, Adani has said publicly it is willing to consider selling stakes in its diverse companies and certainly as far as Adani Ports & SEZ is concerned there may well be a number of suitors, not the least of which will be operators with working associations with their respective wealth funds and investment authorities – for the Port of Singapore with Temasek, Abu Dhabi Ports with the Abu Dhabi Investment Authority and Q Terminals with the Qatar Investment Authority.
It may indeed be that by the time this commentary hits the streets there will be an announcement in this respect, with the Port of Singapore identified by informed sources as closing in on securing a stake in Adani’s ports division with this investment reportedly to be used for expansion and acquisition.
The Adani Group has recently come in for some criticism regarding its debt position, with an August CreditSights report in particular identifying the company as over-leveraged. Indeed, even after adjustments, made in September, to its original report following engagement with Adani Group finance and other executives, CreditSights continued to express concerns about the Adani group’s overall debt levels. For its part, the Adani Group has made clear that it considers its debt position, in each of the sectors it is active in, is line with standard industry metrics.
The move to raise US$10 billion in debt takes place following a period of massive expansion in the Adani Group, with some big cash transactions, and against a background of interest rate hikes – for example the 2029 bond issued by Adani Ports now yields 9.4 per cent, more than double the rate at issue.
