India’s largest multi-port operator Adani Ports and Special Economic Zone (APSEZ) plans to raise $750 million through an overseas bond sale.
The proceeds from Adani Ports’ bond sale will be used to boost its current capacity or to purchase assets locally. According to media reports, the issue will open in the next three to six weeks for subscription.
One of the executives aware of the bond sale told Economic Times, “Due diligence sessions with the management are currently on. Soon, bankers will begin road shows.”
The bonds could have up to ten years of maturity. The pricing guidelines is yet to be decided.
Last week, the company said that it could provide between 20 percent and 25 percent of profits each year to shareholders. According to a local financial daily, the company’s payouts between FY14 and FY18 was less than 15 percent of profits.
Analysts at Nomura Financial Advisory said, “We had assumed a 15% pay-out for FY20/21 in our estimates but the new announcement is clearly a positive development. With the higher pay-out, we now estimate that return on equity for FY20/21 can be 18.8%-19.8%, which would be a 50 basis point improvement from current estimates.”
Next year, Adani Ports plans to heavily invest in Myanmar. Analysts at Antique Stock Broking said in a note that there has been a ‘renewed capex aggression’ in expanding its presence in port and logistics.