Adani Ports to raise $500 million from overseas bond sale

Adani Ports & Special Economic Zone, the largest port operator in the country, is in the international debt market with a benchmark issue to raise at least $500 million.

This is the third large bond sale by domestic issuers after Exim Bank's $1 billion issue at record low prices in the first week of the moth followed by SBI in the second week with a $6 billion sale. Adani Ports is the largest port developer and operator in the country in terms of volume, with coal and other dry bulk terminals showing an annual capacity of 478.6 million tonnes.

"We are in the dollar debt market and are planning to raise $500 million through a Reg S issue," a merchant banking source told PTI on Wednesday without sharing other details like pricing and tenor saying the issue is the market. The last time it had paid 4.2 percent coupon to $750 million issue last July.

The company will use the proceeds from the issue for primarily for refinancing the early redemption of its dollar bonds due in 2022. In July 2020, the company had raised $750 billion and in December another $300 million, to retire some of its higher cost debt. The highly leveraged Adani Group is on massive expansion mostly using debt.

The proceeds will be used primarily for refinancing the early redemption of its dollar bonds due in 2022, the agency said.

The rating reflects the company's market leading position, the stability of long-term cargo revenue and its operational efficiency, the agency said, adding the pandemic may result in weaker domestic demand and exports, but cargo mobility is largely uninterrupted despite the global lockdowns.

Adani Ports accounted for around 17 percent of the country's seaborne cargo in FY20. It operates 10 ports across the costs with the Mundra Port contributing 62 percent of the group's throughput and serves as the gateway to the landlocked Northwestern region of the country.

Last October, it had acquired 75 percent stake in Krishnapatnam Port, which was primarily funded through a $750 million bond issuance in July.

The company also continued to diversify its throughput from the west coast, with the east coast terminals of Dhamra, Kattupali and Ennore now accounting for 20 percent of total throughput, up from 15 percent a year earlier, according to Fitch.