BlackRock emerges as largest investor in Adani’s USD 750 mn bond issue

New Delhi – Funds managed by BlackRock, the global investment giant, have emerged as the largest subscribers to the Adani Group’s USD 750 million private bond issuance.

The US-based asset manager, which oversees USD 12 trillion in assets, subscribed to one-third of the USD 750 million issuance, which carries a tenure of 3–5 years, according to sources with direct knowledge of the matter.

This investment comes at a time when Adani Group officials are facing scrutiny following a US Department of Justice (DOJ) indictment in a bribery case from November last year.

BlackRock’s move marks its first private placement in India’s infrastructure sector—a segment the firm has become increasingly bullish on.

“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts reshape the global economy,” BlackRock Chairman Larry Fink stated in January 2024, following the company’s USD 12.5 billion acquisition of Global Infrastructure Partners (GIP), a major player in ports, power, and digital infrastructure.

In addition to BlackRock, five other institutional investors—primarily from the US and Europe—participated in the Adani Group’s latest capital raise. These included funds managed by Sona Asset Management.

The USD 750 million bond issue was conducted by Renew Exim DMCC, a wholly owned offshore entity of the Adani Group’s promoter family. The proceeds are earmarked for the acquisition of ITD Cementation and other growth initiatives.

The Adani Group sees the entry of the world’s largest asset manager as a strong vote of confidence, especially at a time when its fundraising ability is under scrutiny due to the ongoing DOJ investigation.

BlackRock’s involvement also signals that it does not foresee significant operational disruption for the conglomerate stemming from the legal proceedings.

This is the Adani Group’s second private dollar bond issuance. In February, it raised approximately USD 200 million for its Australian port operations. The latest issuance—almost four times larger—is the most significant since the DOJ indictment.

Renew Exim is raising the funds to finance the acquisition of ITD Cementation. Last year, the Adani Group announced the purchase of a 46.64 per cent stake in the company for Rs 5,888.57 crore from its promoters, aiming to strengthen its engineering capabilities in the infrastructure sector.

Renew Exim has since acquired an additional 20.81 per cent through an open offer at Rs 400 per share. ITD Cementation, known for its work on major infrastructure projects such as the Jawaharlal Nehru Port Trust and ports in Tuticorin, Mundra, and Vizhinjam, is regarded as a strategic asset for Adani’s long-term infrastructure ambitions.