US-based BlackRock emerges as largest investor in Adani’s $750 million bond issue

The investment comes at a time when Adani Group officials are under scrutiny following a US Department of Justice indictment in a bribery case in November last year

New Delhi: Funds managed by BlackRock, the global investment behemoth, emerged as the largest subscribers of the USD 750-million private bond issuance by the Adani Group.

The US-based asset manager, overseeing USD 12 trillion in assets, has taken on one-third of the USD 750 million issuance, which carries a tenure of 3-5 years, sources with direct knowledge of the matter said.

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

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

“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” BlackRock Chairman Larry Fink had 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.

Aside from BlackRock, five other institutional investors —primarily American and European — also participated in the Adani Group’s latest capital raise. These included funds managed by Sona Asset Management.

The USD 750 million bond issue of Renew Exim DMCC, a wholly owned offshore entity of the Adani group promoter family, is to be used to finance acquisition of ITD Cementation and other growth avenues.

The Adani Group views the entry of the world’s largest investor as a strong vote of confidence, particularly at a time when its fundraising capabilities have been questioned due to the ongoing DOJ investigation.

BlackRock’s involvement also signals that it does not anticipate any significant operational disruptions for the conglomerate stemming from the legal proceedings. This marks the Adani Group’s second private dollar bond issuance. In February, the group raised about USD 200 million for its Australian port operations.

The latest raise — almost four times larger — is the most substantial since the DOJ indictment.

Last year, the Adani Group announced the purchase of a 46.64 per cent stake in ITD Cementation for Rs 5,888.57 crore from its promoters, aiming to bolster 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 key projects such as Jawaharlal Nehru Port Trust and ports in Tuticorin, Mundra, and Vizhinjam, is seen as a strategic asset for Adani’s long-term infrastructure ambitions.