APSEZ's $70-million bond issue to boost Indian infrastructure

SPECIAL REPORT
APSEZ's $70-million bond issue to boost Indian infrastructure
A general view of a container terminal is seen at Mundra Port, one of the ports handled by India's Adani Ports and Special Economic Zone Ltd, in Gujarat. The Adani Group has now exhibited its ability to mobilise global resources commensurate with its long asset life.Courtesy: Reuters

Adani Group flagship becomes country's first infrastructure company to successfully raise 20-years money from international markets.

Adani Ports and Special Economic Zone Ltd (APSEZ) has raised $750 million through issues of bonds, including a 20-year unsecured bond issue, from the global markets – becoming the first infrastructure company in India to successfully raise 20-years money from international markets.

According to a statement by APSEZ, the coupon rates for the 10.5-year and 20-year dual-tranches bonds were fixed at 3.8 per cent and 5 per cent, respectively, and the issuances were oversubscribed by more than three times. "APSEZ has continued to receive exceedingly strong participation (for its successive bond offerings) from its high-quality real money investors across all geographies," the company said in a statement.

This issuance reflects the confidence international financial markets have in the fundamentals of the Adani Group's business model and its ability to execute.
- Karan Adani, CEO and Whole Time Director of APSEZ

The issuance establishes the Adani Group as India's leading issuer with the ability to access international capital markets across all market cycles. "APSEZ is the only infrastructure company in India to successfully raise 20 years money from international markets, an achievement that underscores the strength of the company's unique business model and strong fundamentals as well as APSEZ's commitment to ESG and the UN Sustainability Development Goals," it said.

Watch This Special Address On The Significance of ESG by Gautam Adani, Founder, Adani Group At The India Global Forum.

Focus on ESG

Last year, the Dow Jones Sustainability Emerging Markets Index ranked APSEZ at number 14 in the highly competitive global transportation and transportation infrastructure sector – the only company from India to have been included in this sector. This initiated the presence of APSEZ on the DJSI Emerging Markets Index, one of the most sought-after Sustainability indices in the world that represents the top 10 per cent of the largest 800 companies within the world’s 20 emerging markets and is based on long-term Environment, Social and Economic, and Governance criteria.

Within the Adani portfolio, APSEZ is the third issuer of long tenor bonds after energy utilities Adani Green Energy Ltd (AGEL) and Adani Transmission Ltd (ATL). Having issued the long tenor bond in developed markets, APSEZ has elongated the debt maturity to over seven years from six years. APSEZ's natural hedge through its foreign currency earnings allows the company to manage its foreign currency exposure.

A dozer unloads wheat next to a ship at Mundra Port, one of the ports handled by India's Adani Ports and Special Economic Zone Ltd. The Group’s growth model of building and developing world-class infrastructure assets and accessing global financial markets is unreplicated in India's business landscape.
A dozer unloads wheat next to a ship at Mundra Port, one of the ports handled by India's Adani Ports and Special Economic Zone Ltd. The Group’s growth model of building and developing world-class infrastructure assets and accessing global financial markets is unreplicated in India's business landscape.Courtesy: Reuters

Debt ratio reconfigured

This issuance has also reconfigured the ratio of APSEZ's debt from overseas investors from 69 per cent to 73 per cent.

"This issuance reflects the confidence international financial markets have in the fundamentals of the Adani Group's business model and its ability to execute," said Karan Adani, CEO and Whole Time Director of APSEZ. The company was proud of being India's first infrastructure company to raise $750 million of dual tranche 10.5-year and 20-year unsecured bonds in global capital markets, he added. "This issuance reflects the confidence international financial markets have in the fundamentals of the Adani Group's business model and its ability to execute,” he said.

Guiding force. Indian billionaire Gautam Adani has demonstrated his company’s capacity to being India's first infrastructure entity to raise $750 million of dual tranche 10.5-year and 20-year unsecured bonds in global capital markets.
Guiding force. Indian billionaire Gautam Adani has demonstrated his company’s capacity to being India's first infrastructure entity to raise $750 million of dual tranche 10.5-year and 20-year unsecured bonds in global capital markets.Courtesy: Reuters

Adani said it further demonstrates the company’s ability to mobilise global resources commensurate with its long asset life and is a part of the capital management program to lock lower interest rates over an extended tenor and extend debt maturity. "The reduced cost of capital will translate into greater capital efficiency as well as enhanced shareholder returns."

Following this issuance, APSEZ has raised the national bar for issuing long tenor bonds and has established a robust financial foundation that will continue to support the development of large infrastructure assets. The Adani Group's growth model of building and developing world-class infrastructure assets rapidly and thereafter accessing global financial markets is unique and unreplicated in India's business landscape.

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