Adani arm to raise $1.5 bn in overseas debt in 2014 :

Mumbai: Adani Enterprises Ltd, the port and power generation subsidiary of the $8 billion (around Rs.48,000 crore) Adani Group, has started meeting investors to raise $1.5 billion in overseas debt this year, three people familiar with the plan said.

Adani Enterprises is trying to take advantage of global investor appetite for Indian debt, which is reining in the cost of raising funds overseas.

The first tranche under the fund raising plan would be raised this month via a Singapore $200 million (around Rs.960 crore) five-year bond issue, the people said.

The bonds will be sold by the company’s subsidiary Adani Abbot Point Terminal Pty Ltd, and could be a precursor to a larger issue later this year, the people said on condition of anonymity because the information is not public yet.

Standard Chartered Plc. and Singapore’s DBS Bank Ltd are the bankers to the Singapore dollar sale, which will open later this month in Australia, where Adani Abbot is based.

“Right now bankers are only gauging the investor mood through a roadshow that started earlier today. It may take a while before the issue really opens,” said one of the persons quoted above.

“They are planning a large issue and this could be just a small one to check investor appetite. Once they see investor demand it is possible that they will open and close the issue in a hurry, but it has not come to that stage as yet,” said the second person.

The proceeds of the issue will likely be used for the company’s power projects in India and coal projects in Australia.

Adani Enterprises, the holding company of Adani Abbot Point, declined to comment for this story.

Last October, Adani Abbot raised Australian $500 million (around Rs.2,850 crore) by selling five-year bonds which were priced 225 basis points above the five-year local swap rate, which was then at 3.78%. Deutsche Bank AGand Australia-based Westpac Banking Corp. and Commonwealth Bank of Australia were the bankers to that issue.

The company is also in the market to raise money in Swiss francs. Roadshows for the sale were held in March, said one of the persons quoted above.

If successful, Adani will become the 14th entity from India to raise funds via foreign currency bonds this year.

So far in 2014, 13 entities including banks have raised a total $7.38 billion through the issue of overseas bonds in different currencies.

In 2013, Indian corporations raised more than $14 billion from overseas bond markets.

Debt sold by Indian firms has become attractive for investors given an improvement in some economic indicators like the current account deficit and fiscal deficit that have both narrowed and recent stability in the local currency, said N.S. Venkatesh, head of treasury at IDBI Bank Ltd. 

 

Gauri Kesarwani.

PGDM- 2ns sem

Source: Livemint