Adani Group Eyes $1.5 bn Yen Debt After Positive Ratings of Three Cos

Three companies of the Gautam Adani-led conglomerate received credit ratings from the Japan Credit Rating Agency (JCR) on Thursday. The ratings were followed by reports that claimed Adani group is planning to raise about $1.5 billion in debt in Yen denomination from Japan.

According to these reports, the ports-to-power conglomerate is looking to diversify its financing base, which could see yen-denominated bonds account for as much as a quarter of its total global borrowings. The reports were published by The Economic Times (ET) and Bloomberg.

On Friday, the group announced the JCR ratings, calling them “a significant milestone in the group’s global credit journey”.

JCR assigned Adani Ports and Special Economic Zone Ltd (APSEZ) an A– (stable) rating, which is above India’s sovereign rating. Adani Green Energy Ltd (AGEL) and Adani Energy Solutions Ltd (AESL) were each rated BBB+ (stable), in line with India’s sovereign rating of BBB+.

“These landmark ratings reflect the Adani Group’s commitment to disciplined financial management, strengthening balance sheet fundamentals, and world-class execution across our diversified infrastructure platform. They reaffirm the depth and resilience of our business model and reflect the confidence global lenders, institutional investors and capital markets place in our long-term strategy,” said Jugeshinder Singh, group CFO, Adani Group.

However, the company did not comment on the reports on the debt raise.

According to the ET report, the move is expected to help the conglomerate broaden its investor base by accessing Japanese banks, insurers and pension funds. It added that the group plans to raise the equivalent of $1 billion to $1.5 billion through yen-denominated debt over the next 12 to 18 months. Major Japanese banks, including MUFG, Mizuho, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, already have long-standing relationships with the group.

Separately, Bloomberg reported that the fundraising is likely to be structured through a mix of bonds and loans, with tranches led by Japanese banks. The group plans to approach asset managers, corporate treasuries and insurers for tenors of five to 15 years.

The group is also expected to tap large institutional investors that typically favour long-term lending. Such investors are known to offer longer maturities, often ranging from 10 to 30 years, while the overall cost of borrowing, including hedging, is currently estimated at about 8% to 8.5%, with scope for further moderation depending on market conditions.

The proposed fundraising would significantly increase Adani’s exposure to Japan, the newspaper added. The group already has around $3 billion of Japanese exposure as part of its overseas debt of about $15 billion across entities such as Adani Ports, Adani Green, Adani Energy Solutions and Adani Enterprises.

Over the medium term, the conglomerate expects its Japanese borrowings to cross $5 billion within two to three years as ties with local lenders deepen, the report said.