Adani Ports to buy back another Rs 1,623 cr of 2024 bond

By Harry Suhartono

Adani Ports and Special Economic Zone Ltd. will buy back as much as Rs 1,623 cr of its 2024 bond, as the Indian conglomerate backed by billionaire Gautam Adani seeks to move on from the allegations levied by a US shortseller. 

The 3.375 per cent notes jumped the most since April on news the company would pay Rs 81,135 for every Rs 83,215.70 in principal for debt tendered by October 11. Thereafter, the offer price drops to Rs 80,303.15 per Rs 83,215.70, it said in a statement on Wednesday. 

Adani Ports said it would fund the purchase from its cash reserves and said the bond in question has Rs 4,328 crore in principal outstanding.

Credit: Bloomberg Photo

The announcement takes place just as Adani Group seeks to refinance Rs 29,133 crore worth of debt taken out for an acquisition, having suffered a blow earlier this year after Hindenburg Research levied accusations of malfeasance that triggered a selloff in its bonds and shares. Adani repeatedly denied the claims. 

Having plunged as low as 85.8 cents on the dollar in February after Hindenburg’s allegations, the 2024 notes have recovered and were trading at 96.5 cents on the dollar on Wednesday, Bloomberg-compiled data show. The buyback offer constitutes a slight premium to the current price. 

Bond buybacks allow companies to repurchase debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their due date.

The announcement marks the Indian firm’s second tender offer for its 2024 notes in just a few months. It intends to continue repurchasing notes in coming quarters. 

Adani’s announcement bucks the global trend. After interest rates rose sharply, companies have been repurchasing less debt. Keeping bonds with lower coupons for longer means they don’t have to take out more expensive new debt instead.

The Adani tender offer expires at 5:00 pm in New York on October 26.