The company, with a market capitalisation of ₹2.6 lakh crore, has placed uniquely structured bonds with a clutch of local private credit funds to mobilise ₹500 crore, said two persons familiar with the issuance that closed on January 9.
Under the deal, in the event of a default, bond investors will have the right to claim Adani Ports’ receivables from another Adani company, which had borrowed from the former. Some of the bond market officials told ET this is a rare arrangement.
Investors who subscribed to the bonds will have a pari-passu charge on the identified loans and receivables arising from the financial assistance provided by Adani Ports to its group company, Adani Krishnapatnam Port, a document filed with exchanges shows. Typically, investors insist on the assets of the company as security against the loan.
The documents show that APSEZ can replace the security with another entity, but that entity should be income-generating and have receivables out of outstanding financial assistance provided by Adani Ports or its group entity.
APSEZ has provided security cover of 110% of principal and interest components.
The company raised ₹250 crore, offering 8.70% for five-year bonds and another ₹250 crore offering 8.80% for 10-year bonds. Among investors, Trust Investment Advisors invested ₹200 crore, Aditya Birla Money invested ₹100 crore, IIFL Finance and IIFL Home Finance invested ₹50 crore each, and Alpha Financial invested ₹100 crore, said the people cited above.
Adani Ports, Aditya Birla, Trust Investment, IIFL and Alpha did not respond to ET’s request for comments.
AgenciesThe bonds are rated AA- by Icra Ratings on December 26. As per the terms, if the bonds are downgraded to A+, bondholders shall have the right to seek redemption of NCDs and accelerate payment of the outstanding debt.
Also, if the rating falls below AA-, the interest rate would rise by 50 basis points and by 25 bps for every notch downgrade after that. The higher rate would be applicable until the downgrade is reversed. If the rating is upgraded after the downgrade, the interest rate would be lowered by 25 bps but it will not go below the initial interest rate.
The proceeds of the bonds will be used for working capital purposes and for refinancing existing loans.
On January 3, the board of APSEZ approved raising ₹5,000 crore by issuing NCDs.
APSEZ accounted for 24% of the overall cargo handled at the Indian ports in FY2023. It has a 38% share in the container segment and 37% in coal, according to an ICRA report. It has a presence across 14 operational ports with a combined capacity of 602 MMT.
Shares of Gautam Adani companies fell sharply following stock manipulation allegations raised by Hindenburg Research in January 2023 but have rebounded. The Adani Group has steadfastly denied those allegations.
The Adani Ports stock, now near its lifetime highs, has rallied 58% from the lows hit since the Hindenburg report was released.
The Supreme Court, too, ruled on January 3 that it would rely on market regulator Sebi’s report to pass an order on the conglomerate while rejecting a plea for an external investigation into the allegations made by US the short seller.