Adani Transmission Ltd., a power transmission unit of billionaire Gautam Adani plans has lined up about $1 billion bond sale likely to be launched in the first month of next fiscal as it plans to reduce its cost of borrowing, said people familiar with the plan.
The bond float that was initially planned before March is getting pushed behind as investors in the region are dislocated with the travel warnings by governments following the spread of Coronavirus, said those people who did not want to be identified. The proposed bonds will likely have maturity between five and 10 years.
“There’s an increasing feeling within the company that it is better go have bond funds which is a quiet one unlike haggling with banks constantly on various issues,’’ said one of the persons cited above.
Indian companies are increasingly raising funds overseas as local banks turn risk averse and have become cautious over lending due to feared witch hunt by investigative agencies. Furthermore, Indian companies are getting funds cheaper as global investors chasing yields with more than $13 trillion bonds in negative yield are comfortable in lending to investment grade Indian companies. They raised a record $30.25 billion in overseas funds last calendar. Adani Electricity Mumbai Ltd, where Qatar Investment Authority owns 25.1%, raised $1 billion via offshore bonds last week.
The company is in talks with at least half a dozen investment banks including Citi, Deutsche, Mizuho Bank, Standard Chartered. Individual banks could not be contacted immediately for comment. Adani Transmission did not reply to ET’s email seeking comments on the same.
“Following the company’s success in securing several new transmission projects through competitive tenders over the past 2-3 months, we expect ATL’s annual capital spending will exceed our previous projection of INR25-30 billion over the next 18-24 months,” rating company Moody’s said in a note in November last year.
Moody’s assigned Baa3 to Adani Transmission Limited’s overseas issuance. This is the lowest level in the investment grade. Earlier it raised $500 million via bonds.
Adani transmission has reportedly a portfolio of cumulative transmission network of more than 14,800 circuit km, three-fourth of it is operational.
Source: Economic Times