Nearly all the dollar bonds issued by the Adani group of companies extended gains into a second day after its flagship sold $2.5 billion worth of shares.
(Bloomberg) — Nearly all the dollar bonds issued by the Adani group of companies extended gains into a second day after its flagship sold $2.5 billion worth of shares.
The biggest move was in the 2024 debt of Adani Green Energy Ltd., which rose more than 6 cents on the dollar to 82 cents as of 11:20 a.m. in Hong Kong. The bond touched a record low of 70.8 cents on Jan. 30. Thirteen out of 15 dollar-denominated notes by the group tracked by Bloomberg were higher on Wednesday.
The rally for most of the group’s dollar bonds reflects an easing of investor concerns after fraud allegations from short seller Hindenburg Research sent Adani into turmoil. The offering by Adani Enterprises Ltd., India’s largest follow-on share sale, was fully subscribed on the final day.
Adani has at least $289 million worth of dollar note coupon payments due in 2023, according to data compiled by Bloomberg. The first deadline is Thursday, when Adani Ports & Special Economic Zone Ltd. must pay a combined $24.7 million of interest for three bonds.
Even after the rally, the yield on the 2024 Adani Green Energy bond is still close to 20%. “The companies could rely on onshore bonds and bank loans to plug near-term funding needs, while scaling back growth investments if needed,” Bloomberg Intelligence analyst Sharon Chen said, adding that this may curtail Adani’s growth ambitions.
The BI report said that Adani Green Energy faces risks from a weak balance-sheet and liquidity with $1.25 billion bonds due next year.
The issue has also attracted the attention of the country’s financial market regulator, which met with rating firms to discuss Adani group companies, which are backed by Asia’s richest person, according to people familiar with the matter.
Who Is Adani and What Are Hindenburg’s Allegations?: QuickTake
In a hint of the challenges that may be faced by the conglomerate, the group has to put up millions of dollars worth of shares to maintain its collateral cover on a $1 billion loan after a steep selloff in shares across the business empire, according to people familiar with the matter.
(updates with latest prices, details throughout)
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