Adani Green delays $1.2 billion bond issuance

16 Oct 2024 , 11:23 AM

The largest renewable energy firm in the private sector in India, Adani Green Energy, canceled its $1.2 billion bond offering late on Tuesday, citing geopolitical uncertainty as the reason for the investor’s desire for a greater yield than the company was prepared to provide.

“The company and investors engaged in a great deal of back and forth regarding the issue’s pricing. The corporation refused to give in to investor demands for higher yields. Ultimately, the business made the decision to shelve the matter and wait for a more favorable moment once the US presidential election is over and geopolitical unrest has subsided,” according to news reports.

“With significant financial contributions from investors in the US, Hong Kong, and Switzerland, the company had amassed an order book worth $1.6 billion. However, investors were pricing in additional risk because of uncertainty surrounding the US election, which would have cost the company 50–75 basis points (0.50-0.75 percentage points) more than a typical 20-year bond, according to news reports who cited sources.

The company hence decided to defer this issue and look at a better time in the second or third week of November or or mid-January.

For the 20-year bond, the initial price forecast was for a fixed coupon rate of 7%. According to persons familiar with the matter who talked to ET, the bond’s profits were anticipated to assist in freeing up money from banks’ $3.4 billion revolving credit facility, which could have been utilized to finance new initiatives.

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