In a strategic move to strengthen its capital structure, Adani Ports and Special Economic Zone (APSEZ) has announced that its board will meet on May 22, 2025, to consider the issuance of non-convertible debentures (NCDs) on a private placement basis. The proposed fundraising will support the company’s ongoing expansion plans and help refinance existing debt, signaling a proactive approach to balance sheet management.
What Are Non-Convertible Debentures (NCDs)?
Non-Convertible Debentures are fixed-income instruments that offer investors regular interest payments but cannot be converted into equity. Companies typically use NCDs for:
Raising capital without diluting equity
Managing interest rate risk better than bank loans
Accessing long-term funding at competitive rates
For Adani Ports, this route helps maintain financial flexibility while funding capex and refinancing goals.
Key Update: Board Meeting on May 22
The company’s exchange filing stated:
“The Board of Directors will consider the issuance of non-convertible debentures on a private placement basis in one or more tranches for refinancing existing debt and capital expenditure.”
This suggests a dual-purpose fundraising strategy:
Capex funding for expansion of port infrastructure and logistics capabilities
Debt refinancing, likely targeting older, high-cost borrowings for more favorable interest rates
Where Will the Funds Be Deployed?
Adani Ports continues to aggressively expand its footprint across:
Eastern and Western coastline ports
Multi-modal logistics parks
Acquisition opportunities in India and abroad
Digitalization and automation of cargo operations
The expected NCD issuance would provide growth capital without equity dilution, keeping shareholder value intact while pushing long-term growth.
Refinancing Play: Smart Move Amid Rising Rates
With the RBI likely to hold rates steady or lean toward easing later in the year, locking in long-term debt now is a strategically timed decision. The NCDs could replace:
Short-term loans at higher interest costs
External commercial borrowings maturing soon
Project-specific debt with tighter repayment terms
This could improve the interest coverage ratio, extend debt maturity, and enhance credit profile, especially after recent rating upgrades.
Financial Snapshot of Adani Ports (as of Q4 FY25)
| Metric | Value |
|---|
| Net Debt | ?42,000+ Cr approx. |
| Debt/Equity Ratio | ~1.0x |
| Q4 Revenue Growth (YoY) | ~20% |
| EBITDA Margin | ~55%+ |
The company’s robust cash flow generation and stable margins support further leverage to fund capex without stressing the balance sheet.
Conclusion
The upcoming board meeting on May 22 to approve NCD issuance is part of Adani Ports’ larger strategy to scale operations while keeping financial costs in check. By choosing private placement, the company ensures speed, discretion, and efficiency in fundraising. All eyes will be on the quantum, pricing, and tenor of the proposed issuance, which could influence investor sentiment and bond market dynamics.
With growth ambitions intact and a pragmatic financing strategy, Adani Ports remains a key infrastructure play to watch in India’s logistics and maritime ecosystem.
Written by Indira Securities SEBI Registered with 30 plus years of experience in Stock Market