Adani Ports & Special Economic Zone Ltd. (APSEZ) has commenced its first bond buyback since being targeted by a short seller in January, resulting in the company's July 2024 notes experiencing their largest gain in a month. The U.S. dollar-denominated bonds issued by India's APSEZ rose on Monday after the company initiated a cash tender offer for a buyback of securities.
The tender aims to partially prepay the organization's approaching debt maturities and demonstrate its stable liquidity position. Dollar bonds from Adani Transmission, Adani Green Energy (ADNA.NS), and Adani Electricity Mumbai displayed mixed trading results.
In January, Hindenburg Research accused APSEZ of improper use of offshore tax havens and stock manipulation, causing group companies' bonds to plummet dramatically. Currently, India's market regulator is investigating these allegations as well as scrutinizing related party dealings within the group following a directive from the Supreme Court.
"The repurchase demonstrates our commitment towards maintaining financial discipline while ensuring optimal capital allocation," stated Gautam S. Adani, Chairman of APSEZ. He further expressed confidence that this move would strengthen investor faith in the company’s long-term growth prospects.
Balakrishnan Nair V., an independent analyst specializing in corporate finance strategy explained: "By initiating this bond buyback program amidst ongoing scrutiny from regulators and legal challenges faced by other entities within the Group; it signals that APSEZ is addressing concerns over its financial health."
Some institutional investors are taking note of these latest developments with optimism about APSEZ’s future performance despite previous setbacks caused by Hindenburg Research’s accusations earlier this year.
Nandita Agarwal Parker, President at Karma Capital Management LLC noted: “We view Adani Ports’ decision to initiate a bond buyback program as evidence that they have strong financials and are committed to maintaining transparency with investors. This is a positive sign for the company’s future growth potential.”
As India's market regulator continues its investigation into Hindenburg Research's allegations, APSEZ's bond buyback could serve as an essential step in rebuilding investor trust while simultaneously addressing near-term debt maturities.