Bond Market News

Rating agency S&P has now raised flags on the Adani Group following CreditSights’ warning last week. S&P Senior Director Abhishek Dangra said that the group’s rated entities like Adani Ports have healthy cash flows but the “debt-funded” acquisitions being done was taking away the headroom. He said that any future acquisition(s) by the group does at the current pace can put pressure on its ratings. Recently, the Adani Group completed a $10.5bn acquisition of Holcim’s Indian unit Ambuja Cements and its subsidiary ACC, marking its massive foray into the cement space. Most of it was funded by debt. The group’s combined gross debt reached record of INR 2.22tn ($2.75bn) at the end of FY 2021-22, up 42% YoY. S&P added that the domestic banking system as well as some international capital bond market investors are looking at certain kinds of group limits, especially given that some of the business segments Adani’s are entering are unrated.

Adani Ports’ 5% 2041s are down over 0.5 points to 81.71, yielding 6.72%.

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