Stock - Adani
Hindenburg levied accusations of fraud and stock manipulation in a report in early 2023. Billionaire Gautam Adani’s conglomerate has repeatedly denied the claims. Image Credit: Bloomberg

Adani Group began marketing a $409 million bond in what would be its first dollar note after a report last year by short seller Hindenburg Research, adding to signs of a rebound in investor confidence.

The conglomerate’s solar energy unit Adani Green Energy Ltd. and associated firms are offering the 18-year bond at initial price guidance in the 7.125 per cent area, according to a person familiar with the matter, who asked not to be identified because the matter isn’t public.

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Issuing the security would give Adani its latest boost and further allay fears it might have to pay dearly to raise overseas capital after the US shortseller’s claims “- which it has denied “- triggered a rout in the stock and bond prices of group firms.

Adani won fresh equity backing from investors including GQG Partners LLC last year and successfully refinanced $3.5 billion worth of debt for the acquisition of cement companies, helping its securities to recover.

Orderbooks for the new bond totaled more than $1 billion as of midday in Asia on Monday, according to the person.

“We expect good demand for the paper,” said Lakshmanan R, head of South & Southeast Asia corporates at research firm CreditSights. It did not appear that the borrower would “have to pay a premium.”

Nomura Holdings Inc. analyst Eric Liu sees fair value for the new bonds at about 6.825 per cent.

Hindenburg levied accusations of fraud and stock manipulation in a report in early 2023. Billionaire Gautam Adani’s conglomerate, whose business dealings range from ports to airports and solar energy, has repeatedly denied the claims.

Proceeds from the bond sale will be used to redeem $500 million of notes maturing in December. The longer maturity and structure of the new notes removes refinancing risk, Fitch Ratings wrote on February 27. The issuer group operates assets generating solar power in India. The assessor said it expected to rate the new notes BBB-, higher than the debt they’re replacing.

Some of the world’s largest asset managers, including Neuberger Berman Group LLC, bought Adani dollar bonds after the unprecedented rout, according to an analysis by Bloomberg published in January. By contrast, Singapore’s state-owned investor Temasek Holdings Pte exited its position entirely, the analysis showed.

Deutsche Bank AG and Barclays Plc are among the banks tapped to help with the bond deal, a sign that major lenders are prepared to do business with the Indian billionaire.