BlackRock Backs $750 Million Adani Private Bond Issue

In a significant development amidst ongoing legal scrutiny, BlackRock, the world’s largest asset manager, has subscribed to a $750 million private bond issue by India’s Adani Group. The deal, involving several major US and European investors, reflects a cautious but notable return of investor confidence in the conglomerate. The raised capital will fund Renew Exim, a subsidiary of Adani, in its acquisition of ITD Cementation, bolstering its stake in India’s rapidly expanding infrastructure sector. This move comes even as Adani’s chair, Gautam Adani, faces allegations in the US over a $256 million bribery scandal related to solar energy projects.

Key Highlights

Investor Participation

• BlackRock and several other US/European investors took part in the $750 million bond sale.
• BlackRock reportedly bought about one-third of the debt.

Purpose of Funds

• To fund Renew Exim’s purchase of ITD Cementation, an Indian construction engineering firm.
• Aimed at leveraging growth in India’s infrastructure boom.

Legal Context

• US authorities have charged Gautam Adani and others in a $256 million bribery case to secure solar projects.
• Adani Group called the charges “baseless”.

Shift to Private Placement

• Due to legal uncertainty, the Adani Group avoided public offerings and opted for private placements for the next 6 months.
• US investors currently account for 15–18% of the group’s capital base.

Other Investor Activity

• UK’s Sona Asset Management also participated in the bond sale.
• Jefferies and JPMorgan have reportedly maintained ties with the group despite controversies.

Financial Moves by Adani Group

• Adani Green Energy suspended a $600 million bond sale after the indictment.
• Recently refinanced a $1.1 billion loan and held non-deal roadshows.

Regulatory Uncertainty

• The pause on the Foreign Corrupt Practices Act (FCPA) enforcement by the Trump administration may impact the case.
• Experts suggest US banks might stay away until clarity emerges.

Historical Context

• This is the second major controversy after the 2023 Hindenburg Research allegations of fraud and manipulation.
• Adani has maintained that such allegations make the group “stronger”.