Adani Group Bonds: Global FIs join BlackRock for Adani’s $750 million bonds

Mumbai: A clutch of premier US and European financial institutions, hedge funds and private credit institutions have joined BlackRock, the world’s largest asset management firm, to subscribe to Adani Group’s recent $750 million private bond issue, multiple sources told ET, underscoring rising comfort levels of high-street money managers with the infrastructure conglomerate.

This would be the group’s biggest fundraising since the US Department of Justice indicted Adani over an alleged bribery plot in November. Last week, Adani Group officially announced the fundraising update, but did not disclose either granular details of investors or pricing and tenure of the paper.

“BlackRock is as big as it gets. These are all SEC-regulated entities. For them to come on board is a big endorsement for the group,” said a London-based bond investor with exposure to Adani. “Not too far ago, the Group had to pull out of a dollar bond issuance at last minute as the market was skittish following the SEC indictment. However, there is also another way to look at this. This is arguably the first time the group is tapping the high-yield credit market for an onshore acquisition.”
BlackRock picked up a third of the entire sum and was the largest subscriber to the 3-5 year paper. Farallon Capital Management, Elham Capital-private credit arm of Hillhouse-Sona Asset Management and King Street Capital were others in the consortium, said people in the know.

Even though details of pricing remain undisclosed, industry players said the paper would be attracting 14% dollar returns for the investors.

All the above asset managers barring BlackRock had earlier participated in financing of a smaller $200 million debt facility for Adani’s Australian port operations at Abbott Point, said the people mentioned above.This would be BlackRock’s maiden private placement in India’s infrastructure sector. The funds were raised by Renew Exim, a private group-level entity, to finance the acquisition of ITD Cementation India.ITD Buyout
Last September, the Adani Group announced acquisition of a controlling 46.64% stake in the company for ₹5,888.57 crore from its Italian-Thai promoters.

Renew Exim has since acquired an additional 20.81% through an open offer at ₹400 per share.

Following the completion of the deal, Renew Exim will hold 67.45% of ITD Cementation.

Mails to Adani Group remained unanswered until the publication of this report. Elham Capital did not respond to ET’s queries. Farallon, King Street, Sona Asset Management declined to comment.

In its March 4 edition, ET had reported BlackRock and hedge fund Citadel were in talks with Adani to refinance another tranche of $750 million debt taken by Mumbai International Airport Ltd from Apollo Global Management in 2022.