Vedanta tests offshore dollar bond demand amid Adani-induced uncertainty

By Ameya Karve and Divya Patil

 

Vedanta Resources Ltd. is going ahead with its second dollar bond offering in two months, testing investor appetite for Indian offshore debt just days after the US indictment of Adani Group founder Gautam Adani.

 

A unit of Vedanta, a London-based mining company with most of its operations in India, is selling a callable note, according to people familiar with the matter who asked not to be identified. It’ll be in two parts, maturing in 3.5 and seven years, with initial price guidance set in the 10.375 per cent and 11.375 per cent areas, they said.  

 

Vedanta, which is controlled by Indian billionaire Anil Agarwal, halted the sale last week amid market volatility, after the US charged Gautam Adani with helping drive a $250 million bribery scheme. Adani itself scrapped a dollar bond sale priced just that day.

 

The Adani Group has denied the US allegations.

 

Vedanta going ahead with its own offering shows confidence in its prospects. The company extended due dates on some of its dollar bonds in January, seeking to improve its capital structure and overall financial position. It sold a $900 million, five-year callable note in September and raised another $300 million last month by reopening the same debt.

 

Investors have rewarded the moves so far. Vedanta Resources Finance II Plc’s notes due in April 2026 have climbed nearly to par, after touching a low of about 60.4 cents in January, according to data compiled by Bloomberg. With a 77 per cent gain this year, the notes are one of the best-performing junk bonds in Asia.

 

Vedanta plans to use the proceeds from the current offering to refinance outstanding bonds due in 2028, the people familiar with the matter said. Citigroup Inc., Barclays Plc, Deutsche Bank AG, JPMorgan Chase & Co. and Standard Chartered Plc are the banks managing the sale, they said.