Adani Green Energy Limited aims to revive its US dollar bond deal from two of its green energy businesses Adani Hybrid Energy Jaisalmer and Adani Solar Energy Jaisalmer. The company aims to raise USD 2 billion through international bonds and loans over the coming months for renewable projects.
The company is preparing to launch a USD 600 million bond issue in the next few days, according to a report by the Economic Times. Previously, Adani had planned to a fix a coupon rate of 7 per cent for a 20-year bond, but the pricing is expected to be higher this time due to rising yields in global markets, including the 10-year US Treasury rate, that touched its highest level recently.
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Adani Green Energy Limited had postponed its USD 1.2 billion bond issuance, a 20-year green bond sale in the last minute in mid-October, which was intended to raise funds for its renewable energy projects.
The Indian conglomerate is returning to the bond market with a broadly similar deal structure after yields on US dollar notes climbed following the election of President-elect Donald Trump and greater uncertainty about the pace of rate cuts by the Federal Reserve, ET reported.
The reason for the delay has been linked to market conditions, with the company citing unfavorable market conditions as a key factor. There were concerns about rising interest rates, global economic uncertainty, and potential investor caution, especially given the broader financial climate.
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Adani Group companies have been under some scrutiny due to regulatory and financial challenges, particularly following a short-seller report in early 2023 where the US-based short-seller Hindenburg Research had accused the Adani Group of financial misconduct and stock price manipulation.
This scrutiny had affected investor sentiment toward the group. These factors likely contributed to the decision to delay the sale in order to avoid unfavorable terms and achieve better market conditions.
The Adani group had initially set out to offer a yield of 7 per cent for the 20-year maturity, but decided not to proceed with the sale as some investors were demanding a higher yield.
The yield on Adani Green’s 2042 note has increased to 7.2 per cent from being under 7 per cent in mid-October, as per Bloomberg’s data.
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