(Bloomberg) — Goldman Sachs Group Inc. and JPMorgan Chase & Co. told several clients that bonds related to Gautam Adani’s business empire could offer value due to the strength of certain assets.
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In a call with investors on Thursday, Goldman Sachs trading executives expressed the company’s view that Adani debt hit the floor shortly and Adani Ports & Special Economic bonds Zone Ltd. has become attractive at current prices due to its value to the company’s assets, people with knowledge of the matter said. Before Adani sold the shares, JPMorgan credit analysts said in a note to clients that they saw the value of debt owed by some of the companies that run Adani.
Adani Securities has attracted attention from opportunistic investors as a dramatic drop in equity and a drop in debt has sent some bonds into disrepair. That led to interest from clients of the biggest Wall Street banks to understand the extent of the crisis surrounding the Indian billionaire, who was targeted by short seller Hindenburg Research before canceling his share sale. section for Adani Enterprises Ltd.
Goldman Sachs traders tout Adani Ports’ debt well-capitalized with cash on hand and liquid enough to trade. They also expect the institution to be able to refinance its bonds while having the prospect of attracting equity investors and selling assets, according to people who requested anonymity when discussing comments. private.
A spokesperson for Goldman Sachs declined to comment on the client’s call.
Goldman said it traded around $170 million in Adani bonds on Thursday before the call, drawing interest from global funds and distressed investors outside of Asia looking to recover the debt. from the very beginning.
Bonds of Adani-linked companies fell to hard-hit levels after the company canceled a planned $2.4 billion offering on Wednesday, even though it received security money from the Middle East. and India.
Read more: Adani bonds hit hard hit after stock sales pull
Goldman traders told investors it’s likely bond prices have hit the floor with no evidence of forced selling or contagion, according to the people.
Adani Ports bonds rose more than 4 cents against the dollar on Friday, according to prices compiled by Bloomberg.
Meanwhile, analysts at JPMorgan say Adani’s journey has not been easy, but the bank still wants to continue its exposure to this group, through well-managed asset bonds with outside shareholders. .
Within the vast Adani Group of companies, JPMorgan houses the bonds of Adani Electrical and the operating companies of Adani Green Energy Ltd. higher in their ranking order.
“We think ultimate asset value as well as corporate governance comfort will be greatest for heavily regulated assets,” the analysts wrote in a note last week. .
(Add bond prices and charts in the ninth paragraph.)
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