Adani Green Energy, Adani Ports & SEZ, Adani Energy Solutions, Adani Power, and two unlisted firms, Adani Airports and Adani Roads, under Adani Enterprises Ltd., are six portfolio companies within the Adani Group that will soon access the local and international bond markets. The Adani Group has set aside $84 billion for infrastructural projects over the next 10 years to manage the ongoing Adani case. For India, these are essential resources.
According to Jugeshinder Singh, the Group Chief Financial Officer of Adani Group, Adani Green is the largest renewable energy company. Adani Ports manages 30% of India’s freight, and Adani Airports handles 30% of Indian passengers and cargo. Global markets will be the primary source of long-term funds.
The Adani Group intends to invest $84 billion over the next 10 years
Chief Financial Officer Jugeshinder Singh announced on 1st December 2023 that the Adani Group of India intends to invest Rs. 7 trillion ($84.00 billion) in infrastructure projects over the following 10 years. Jugeshinder Singh stated that their capital expenditures would increase to operate and build infrastructure, but he did not specify the projects the company would work on. The port-to-power corporation develops and manages several highways and airports and operates the biggest private port in India.
Speaking on the fringes of the Trust group event in Mumbai, Singh stated that the billionaire Gautam Adani-led company will also decide within the next three months to transfer its investment in Adani Wilmar (ADAW.NS), its joint venture (J.V.) with Singapore’s Wilmar International. Adani Group owns a 44% share in the joint venture and has been debating whether to sell its investment for a few months.
Despite the current Adani case, Gautam Adani and his family may continue to hold a minority share in their capacities.
Domestic issuances make up roughly 6% of total
The current percentage of domestic issuances is approximately 6%, and the goal is to raise it to 20%. The Adani Group wants Indian investors to be part of India’s infrastructure success story. This is where money should be made, according to Singh. Adani’s portfolio saw a portfolio-level E.B.I.T.D.A. increase to Rs. 23,532 crores in the June quarter of 2023–24, representing a 42% annual growth.
Ensuring steady cash flows, the utilities and core infrastructure platform accounted for 86% of the overall portfolio E.B.I.T.D.A., reaching Rs. 20,233 crores in June 2023. This offers high predictability and visibility for multi-decadal earnings and stability. According to the Adani Group, despite the Adani case issue, the portfolio maintained a good liquidity position as a consequence of the strong profitability, with a cash balance of Rs. 42,115 crores at the end of June 2023, representing a 4.2% rise over the previous quarter.
Fundraising plan despite the Adani case
According to Singh, the domestic market provides 20% of the company’s shorter-duration capital, with the remaining 80% coming from the long-duration capital market. Airports and roads may soon be able to access the domestic bond market through Adani Group subsidiaries Adani Ports and S.E.Z., Adani Green Energy , Adani Power , and inside Adani Enterprises. Singh did not, however, provide any more information regarding the timetable or quantity.
In February 2023, the Group may also consider issuing bonds to the general public. In 2024, Adani Green Energy and Adani Transmission might issue Regulation-S and Regulation-D bonds by accessing the foreign bond market. According to Singh, Adani Green Energy has to raise $350 million in notes to refinance its current debt, which is due in December 2024. $1 is equal to 83.3299 rupees in India.
Estimating need and accelerating speed
The second banker, who counsels the company on local borrowings, said that the Group is testing investors’ appetite for its securities and will tap the market only when there is a comfort of demand. The Group’s flagship companies, Adani Enterprises and Adani Electricity Mumbai, are reportedly in discussions about potential debt problems. The third banker, who was informed of the talks but was not involved in the transaction, stated that Group companies might have to give a wider spread first than their previous offering.
The banker stated that demand for these bonds would come from corporations, people with high net worth, and certain banks and that domestic institutional investors might not start buying them immediately. Adani Enterprises returned to the market in July to raise 12.5 billion by selling bonds with a 3-year maturity, but the interest rate increased to 10%. The last time Adani Ports raised money from the market was in October 2021, when it issued ₹10 billion in 3-year bonds with a 6.25% rate.
According to people familiar with the Adani case matter, billionaire Gautam Adani’s conglomerate is preparing to sell local currency debt after being the target of damaging allegations made by a short seller in 2023. As a result, the company intends to use the Indian bond market to raise 150 billion rupees ($1.8 billion) in the 2023 fiscal year.
