Global investors unwilling to let go of Adani Group’s dollar bonds despite global uncertainty

New Delhi: Even as tensions stemming from the West Asia crisis unsettle global markets, investors have shown little willingness to part with Adani Group’s dollar bonds, despite a buyback by its ports arm, Adani Ports and Special Economic Zone Ltd (APSEZ).

On March 12, APSEZ, India’s largest private port operator, completed a cash tender offer to repurchase parts of two series of US dollar-denominated senior notes, trimming its outstanding debt by about $199.5 million, people with direct knowledge of the matter said.

The offer covered up to $345.1 million of 4 per cent notes due in 2027 and $150 million of 3.10 per cent notes due in 2031, suggesting a potential buyback of roughly $495 million. Yet bondholders offered back far less than that. APSEZ eventually accepted $102.1 million of the 2027 notes and $97.5 million of the 2031 notes, they said.

In effect, more than 60 per cent of investors chose to keep their bonds, declining the opportunity to exit through the tender offer. After the early tender deadline, holders submitted an additional $0.5 million of the 2027 notes and $2.13 million of the 2031 notes, bringing the total repurchased to $199.5 million, they said. The exercise forms part of APSEZ’s broader effort to utilise its excess cash on the balance sheet and gradually reduce leverage. In recent years, the company has used refinancing & selective buybacks to reshape its debt profile while maintaining access to international capital markets.

“We were expecting more investors to tender their shares, but the response has been quite positive,” said one of the persons involved in the transaction.

Investors’ limited participation in the tender suggests a steady appetite for the group’s debt, particularly among global funds looking for exposure to India’s infrastructure expansion.

According to people familiar with the matter, some US-based institutional investors have also continued to add to their holdings in Adani-linked bonds in the secondary market. Settlement for the notes accepted after the early tender date is expected around March 16.

For APSEZ, the buyback provides a modest reduction in debt and underscores its liquidity position. For bondholders, the choice to stay invested points to a continuing willingness to back one of India’s largest privately-owned infrastructure groups.