Adani Group Starts Debt Buyback for $130 Million,Bonds Rise

In an effort to demonstrate that its liquidity position is comfortable, Adani Group Ports & Special Economic Zone Ltd. stated that it intends to buy back up to $130 million of its July 2024 bonds as well as comparable sums over the course of the following four quarters.

Bonds issued by the Adani Group increased after a significant company began the conglomerate’s first debt buyback since being the target of a short sale in January. Gautam Adani is an Indian billionaire.

Adani Ports & Special Economic Zone Ltd. stated in a stock exchange filing that it intends to buy back up to $130 million of its July 2024 bonds as well as comparable sums over the course of the following four quarters in an effort to demonstrate that its liquidity position is favourable.

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As of 11:27 a.m. on Monday in Hong Kong, prices for 10 out of 15 dollar-denominated notes of Adani Group companies were up. The largest increase in a month, 0.69 cents on the dollar, of Adani Ports’ July 2024 3.375% senior debt served as the catalyst for this increase.

The buyback would be the company’s second attempt to win back investor confidence after a Hindenburg Research report battered its bonds and stock. This effort would also include cutting capital expenditure. According to Bloomberg Intelligence, Adani Ports’ “measured pace” of debt repayment should allow it to stick to its revised capital spending target of 40 to 45 billion rupees ($548 million) in the fiscal year that began this month.

According to a report from BI analyst Denise Wong dated April 24, “Adani Ports’ plan to cut capital spending in half and prepay 50 billion rupees of debt could alleviate refinancing concerns ahead of major maturities in 2024.” However, those actions “will impede the company’s ability to boost earnings growth via infrastructure expansion and M&A.”

According to BI analyst Sharon Chen, there are still concerns about the $6 billion in Adani bonds that could potentially be downgraded to high-yield debt due to the so-called “fallen-angel risk.” She added that given its strong cash flows, Adani Ports might be under less stress than the group’s utility companies.