Adani Group’s solar energy company, Adani Green Energy Ltd., and related firms, known together as Adani Green Energy Restricted Group 1, recently saw a big increase in investor trust.
They sold their first public bond since facing criticism and got about $2.9 billion in orders for a $409 million bond that lasts 18 years. That means people wanted to buy the bond about seven times more than what was available.
This is a big deal for the company and shows that investors are starting to trust them again. The interest rate on the bond was set at 6.70%, which was lower than expected, showing that investors feel better about the company now.
Xuchen Zhang from Jupiter Asset Management Ltd thinks this is an important step for Adani to get back to being seen as a good investment.
Reaction Of the Market and It’s Pricing
The bond sale went well, starting with an interest rate of 7.125%.
But because so many people wanted to buy the bond, Adani Group was able to lower the interest rate, which was liked by the market.
Eric Liu from Nomura Holdings Inc. said that the “fair value” for the new bonds was around 6.825%, which means the final interest rate was competitive. This change in pricing helped attract more investors and showed that the company is recovering from its past problems.
Using Capital and Evaluations
The money earned from selling bonds will be used to pay back a $500 million loan that’s due in December. This shows that the Adani Group is being proactive about managing its financial responsibilities.
Fitch Ratings said the new bonds have a longer time before they need to be paid back and are structured in a way that lowers the risk of needing to refinance.
Also, the new bonds are expected to have a rating of BBB-, which is better than the debt they’re replacing. This rating shows that the company’s operations, mainly focused on making solar power in India, are viewed positively.
Investor Trust and Future Opportunities
The bond sale not only got a lot of interest but also got attention from some of the world’s biggest investment managers, like Neuberger Berman Group LLC.
This is different from what Singapore’s government-owned investor Temasek Holdings Pte did – they completely sold their position.
Big banks like Barclays Plc and Deutsche Bank AG helped with the bond sale, showing that important lenders are willing to work with Adani Group.
The successful bond sale and support from well-known financial institutions show that the company is strong and can handle challenges like the report from Hindenburg Research.
