Adani Group plans up to 1.5 billion yen fundraising from Japan after rating upgrade – News Air Insight

Adani Group plans to raise the equivalent of $1 billion to $1.5 billion in yen-denominated borrowings from Japan over the next 12 to 18 months, stepping up access to one of the world’s deepest pools of long-term capital after credit upgrades by a Japanese rating agency.

The fundraising will follow Tokyo-based Japan Credit Rating Agency’s decision to initiate ratings on three Adani companies -Adani Ports and Special Economic Zone, Adani Green Energy and Adani Energy Solutions. Adani Ports was rated A-, placing it above India’s sovereign rating, while Adani Green and Adani Energy Solutions were rated BBB+, at par with the sovereign.

The upgrades are expected to widen Adani’s investor base in Japan, allowing the group to tap banks, insurers, pension funds and large institutional investors that prefer long-tenor debt. Japanese investors are known for offering maturities of 10 -20-30 years, far longer than what is typically available in domestic markets.

“Based on APSEZ’s revenue structure, which depends on external trade, its sound financial profile, and its strong access to international capital markets, JCR considers that the company’s rating exceeds the Republic of India’s foreign-currency long-term issuer rating of “BBB+” and is constrained by the country ceiling of “A-” for India,” JCR said in a statement.

Borrowings will be raised through a mix of yen bonds and loans across these three Adani entities.

The cost of borrowing from Japanese investors, including hedging, is currently around 8% to 8.5%, the people said, and could trend lower depending on market conditions. Japan’s ultra-low government bond yields and deep liquidity make it one of the most attractive funding markets globally for infrastructure-heavy groups.

The group’s exposure to Japan could go up to about 20% to 25% of overseas borrowings after this borrowing from roughly 10% to 12% now. Adani currently has about $3 billion of exposure to Japanese lenders and investors, part of its under $15 billion in overseas borrowings spread across entities including Adani Ports, Adani Green, Adani Energy Solutions and Adani Enterprises.Over the longer term, Adani expects total Japanese borrowings to exceed $5 billion within the next two to three years as it deepens relationships with local investors and institutions. Japanese banks such as MUFG and Mizuho already work closely with the group.

The rating revision has placed these Adani group entities among large Indian companies including Tata Consultancy Services, Larsen & Toubro and Reliance Industries, which are rated above the sovereign by international agencies