Goldman Sachs Group Inc. and JPMorgan Chase & Co. some clients have told that bonds related to Gautam Adani’s business empire can provide value due to the strength of certain assets.
During a call to investors on Thursday, Goldman Sachs trading executives expressed the company’s view that Adani debt had bottomed out in the near term and that Adani Ports & Special Economic Zone Ltd. have become interesting at the current price because of the value of those company assets, people in the know said. Before Adani made a share sale, JPMorgan credit analysts said in a note to clients that they saw value in the debt of some Adani operating companies.
Adani securities have caught the attention of opportunistic investors amid a staggering fall in stock prices and a debt slump that pushed some bonds to distressed levels. That has sparked interest from clients of the largest Wall Street banks to understand the magnitude of the crisis surrounding the Indian billionaire, who was targeted by short-seller Hindenburg Research before scrapping a share sale for his flagship Adani Enterprises Ltd.
Goldman Sachs traders praised Adani Ports debt as well capitalized with cash while being liquid enough to trade. They also expected this entity to be able to refinance its bonds while having the prospect of attracting equity investors and selling assets, the people said, asking not to be named in connection with private comments.
A Goldman Sachs spokesperson declined to comment on the customer’s call.
Goldman said it had traded about $170 million worth of Adani bonds on Thursday before the call, sparking interest from global funds and distressed investors outside Asia looking to scoop the debt early, the people said.
Bonds from Adani-related companies fell to distressed levels after the company canceled a planned $2.4 billion offering on Wednesday, even though it had secured money from the Middle East and India.
Goldman traders told investors it was likely bond prices had bottomed, with no evidence of foreclosure or contagion, the people said.
Adani Ports bonds rose more than 4 cents against the dollar on Friday, according to prices compiled by Bloomberg.
Meanwhile, JPMorgan analysts said the journey isn’t easy for Adani, yet the bank preferred to maintain exposure to the group through bonds of well-regulated assets with large outside shareholders.
Within the sprawling Adani Group of companies, JPMorgan places the bonds of Adani Electricity and operating companies of Adani Green Energy Ltd. high in the pecking order.
“We think ultimate asset value and corporate governance comfort are greatest among regulated ring-fenced assets,” the analysts wrote in a note last week.
Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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