BlackRock's Bold Bet: Investing Big in Adani's Infrastructure Amid Scrutiny

BlackRock has become the largest subscriber of Adani Group's USD 750-million private bond issuance. This action comes despite scrutiny over a US DOJ indictment involving the group. The investment is set to fund the acquisition of ITD Cementation and other growth efforts, signaling confidence in Adani's future.

Funds managed by BlackRock, the global investment behemoth, have emerged as the largest subscribers of a USD 750-million private bond issuance by the Adani Group.

The US-based asset manager, which oversees USD 12 trillion in assets, has committed to one-third of the issuance—carrying a tenure of 3-5 years—according to sources familiar with the matter.

This investment comes as Adani Group faces scrutiny following a US Department of Justice indictment in a bribery case. BlackRock's involvement marks its first private placement into India's infrastructure, a sector it is increasingly optimistic about.

BlackRock Chairman Larry Fink had highlighted in January 2024 the potential in infrastructure investment as part of a broader USD 12.5-billion acquisition strategy, saying infrastructure represented exciting long-term investment opportunities amid global economic shifts.

Five other institutional investors have also participated in the Adani Group's latest capital raise, including funds managed by Sona Asset Management. The USD 750 million bond, issued by Renew Exim DMCC, will fund the acquisition of ITD Cementation and other ventures.

The Adani Group regards BlackRock's entry as a vote of confidence amidst fundraising uncertainties due to the DOJ probe. BlackRock's actions suggest they see no major operational disruptions ahead for Adani.

This is Adani's second private dollar bond issuance, following a USD 200 million raise for Australian port operations. Renew Exim raised funds to support Adani's strategic acquisition of ITD Cementation, an asset crucial for its engineering growth ambitions.

(With inputs from agencies.)