LIC’s Rs 5,000 Crore Lifeboat Keeps Adani Ports Navigating Stronger Waters

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Strategic Investment Move
State-owned Life Insurance Corporation (LIC) has subscribed to Adani Ports and Special Economic Zone's (APSEZ) Rs 5,000 crore bond issue in full. This represents a strong financial commitment, solidifying LIC's position as a key institutional investor in India's corporate debt market.

Key Developments
- APSEZ raised funds with the issuance of a 15-year bond, becoming the largest-ever rupee-denominated bond sale of the company.
- The bonds have a yield of 7.75 percent, indicating high investor confidence.
- LIC was the only investor in this privately placed transaction, with no other bids available.

Market Implications
- The investment bolsters the financials of Adani Ports, allowing it to refinance debt and cover capital expenditure.
- The decision falls in line with LIC's investment plan to invest in long-term corporate bonds for steady returns.
- The choice of Adani Ports to go for a private placement implies a strategic strategy to raise funds without tendering higher interest rates in an open market.

Financial Performance
- Adani Ports had a gross debt of Rs 36,422 crore as of March 31, 2025.
- The Ebitda of the company was Rs 20,471 crore, boosting its net debt-to-Ebitda to 1.78 times.
- LIC's corporate bond investments stood at Rs 80,000 crore as of the end of the financial year.

Future Prospects
- The issue of bonds will help fund Adani Ports' expansion plans such as development of infrastructure and operational improvements.
- The company is still looking for opportunities to refine its debt profile with an aim to bring down interest costs through long-term borrowing.
- The investment by LIC reflects faith in Adani Ports' growth path and stability.

Sources: Business Standard, Economic Times, Reuters, Financial Express.