Adani bonds fall to year’s low as investors and lenders weigh bribery allegations

By Tom Westbrook and Yantoultra Ngui

SINGAPORE/SYDNEY (Reuters) – Adani dollar bond prices fell to their lowest level in almost a year on Monday; Investors are reducing their exposure to the Indian conglomerate and some bankers are considering pausing new loans after US authorities charge bribery and fraud.

Gautam Adani, the group’s billionaire chairman, and seven others were charged last week with agreeing to pay nearly $265 million in bribes to Indian government officials.

The charges relate to alleged payments for the development of India’s largest solar power project and for obtaining contracts that could generate $2 billion in profits over 20 years.

The accusations included making misleading statements to the public, despite being aware of the US investigation in 2023.

Adani Group said the accusations, as well as those leveled by the U.S. Securities and Exchange Commission in a parallel civil case, were unfounded and that it would seek “every legal recourse possible.”

Banks and regulators are examining the risks of the conglomerate, which switched from ports to energy after the accusations.

The Singapore banking sector’s overall exposure to Adani Group is small, the Monetary Authority of Singapore said on Monday.

“Banks have measures in place to review and manage their exposure to borrowers and counterparties,” a MAS spokesman said in a statement.

DBS Group, Singapore’s largest bank by assets, said in early 2023 that its exposure to Adani Group was S$1.3 billion ($967 million). DBS declined to comment upon request from Reuters.

Some global banks are considering temporarily pausing new loans to the company but maintaining existing loans after the U.S. accusation, raising questions about the company’s access to future financing, according to some bankers interviewed by Reuters.

“In the near term, the US indictment is likely to restrict the group’s access to financing, particularly in the offshore market,” said a Lucror Analytics note published on Smartkarma.

The company said cash balances of Adani portfolio companies stood at $6.33 billion as of the first half of the current fiscal year ending March 2025.

Cash balances exceed long-term debt repayments for the next 28 months, Adani said in a presentation on the credit and financial performance of its group companies that it regularly shares following its quarterly results.

The crisis is the second in two years to hit the Adani group, which was accused last year by short-seller Hindenburg Research of improper use of offshore tax havens. The company denied these allegations.

In Asian trading on Monday, some of the most liquid debt issued by Adani Ports and Special Economic Zone fell between 1 and 2 cents, while similar selloffs were seen in Adani Transmission debt.

Port bonds maturing in 2027 fell 1.6 cents to 88.98 cents on the dollar, losing about 7 cents in face value since U.S. prosecutors issued the charges last week.

Long-term Port bonds fell on Monday, losing between 8 and 10 cents in par value following the news.

Adani Transmission debt maturing in May 2036 fell 1.8 cents on Monday, having lost more than 7 cents since Wednesday.

Adani Group’s shares on 10 exchanges, led by Adani Enterprises, lost $27.9 billion in market value in two sessions last week following the US accusations.

Shares regained some of the ground they lost on Monday, with Adani Energy Solutions rising 6% and Adani Green Energy rising 4% in early trading.

(Reporting by Tom Westbrook and Yantoultra Ngui in Singapore; additional reporting by Sethuraman NR. Writing by Scott Murdoch in Sydney; Editing by Jacqueline Wong and Lincoln Feast.)