Adani Green to raise $500 million via dollar-bonds
Adani Green Energy, the renewable power arm of Gautam Adani-controlled Adani EnterprisesNSE 0.05 %, is planning to raise about $500-750 million (Rs 3,500-5,000 crore) by selling dollar bonds, as it plans to refinance its debt and expand its business, said two people familiar with the matter.
The company is now seeking international rating before it kicks off its overseas roadshows – likely within a few weeks — to draw investors. The bond-sale could be rated in the high-yield category with BB+, or BB grade, said one of the persons mentioned above.
A high-yield paper is about two-three notches lower than India’s sovereign rating, which is known as investment grade in market parlance.
The dollar-denominated securities would be raised under Regulation S programme, which is available to global investors outside the US.
The company, which was listed on the stock exchanges two weeks ago, has already appointed some investment bankers, including Barclays, MUFG, and Citi. Individual banks could not be contacted immediately for comments.
Adani group too did not respond to ET’s email on the matter.
The bond-sale is expected to end a dry spell in the overseas market as the US Treasury yields have been raising the borrowing cost. Dollar bonds are priced after adding a spread, or mark-up, over the similar maturity US Treasury yields. The spread becomes wider when it is below investment grade.
Adani papers could be of 5 to 10-year maturities where rates may be in the range of 7-8%, depending on investor response, market sources said.
The US Treasury yields shot up by as much as 3.11% amid signs of an improving economy in the third week of May, but dropped to 2.80-2.90% in the past two weeks.
“Many dollar bonds could not happen due to rise in UST (US Treasury) yields. Now it is correcting a bit reviving the dollar bond market sentiment,” said an investment banking head from a US-based bank.
Adani Green shares have started trading from June 18 this year, and on day one the stock hit the 5% upper limit, but pared its gains later. It fell about 11% since its debut to close at Rs 26.25 on Tuesday.
The company has a market capitalisation of about Rs 4,100 crore.
Adani Green has projects in Tamil Nadu and Punjab. The world’s largest single location solar power project was commissioned by the Adani Group at Kamuthi in Tamil Nadu, with an investment of about Rs 4,550 crore, said the company website. The Bathinda plant is also a solar plant based out of Punjab.
Source: economictimes.indiatimes
