Goldman, JPMorgan say Adani bonds offer value to trading clients

Goldman Sachs Group Inc. and JPMorgan Chase & Co. have told some clients that bonds tied to Gautam Adani’s business empire could offer value because of the strength of certain assets.

In a call with investors on Thursday, the head of trading at Goldman Sachs expressed the firm’s view that Adani debt has bottomed out in the near term and Adani Ports and Special Economic Zones Ltd’s bonds are interesting at current prices because of their value. assets of the company, the people said. Before Adani withdrew its share sale, credit analysts at JPMorgan said in a note to clients that they saw value in the debt of some of Adani’s operating companies.

Adani’s securities have caught the attention of opportunistic investors amid a slump in stocks and plunging debt that has sent some bonds to rock-bottom levels. That has led clients of Wall Street’s biggest bank to be interested in understanding the extent of the crisis surrounding the Indian billionaire, which was targeted by short-seller Hindenburg Research before canceling a stake sale in its flagship Adani Enterprises Ltd.

Goldman Sachs traders touted Adani Ports as being well capitalized in debt, with cash on hand and sufficient liquidity to trade. They also expect the entity to be able to refinance its bonds, while attracting equity investors and selling assets, according to the people, who asked not to be named.

A Goldman Sachs spokesman declined to comment on client calls.

Goldman Sachs said it had traded about $170 million in Adani bonds on Thursday ahead of the call, drawing interest from global funds and distressed investors outside Asia looking to buy bonds early, the people said. .

Adani-linked corporate bonds fell to lows after it canceled a planned $2.4 billion sale on Wednesday, even though it has secured funding from the Middle East and India.

Goldman Sachs traders told investors that bond prices had likely bottomed out, with no signs of forced selling or contagion, according to people familiar with the matter.

Adani Ports’ bonds rose more than 4 cents on Friday, according to prices compiled by Bloomberg.

Meanwhile, analysts at JPMorgan say Adani’s journey has not been smooth, but the bank still prefers to maintain exposure to the group through well-regulated asset bonds with large external shareholders.

Among the sprawling Adani group of companies, JPMorgan has prioritized the bonds of Adani Electricity and Adani Green Energy Ltd.’s operating companies.

“We believe eventual asset value and comfort to corporate governance is greatest for regulated ring assets,” analysts wrote in a note last week.

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(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)