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Adani Group’s dollar bond climbed in initial trading, after global investors flocked to its first overseas debt sale since the crisis caused by short seller Hindenburg Research last year. 

The $409 million note by Adani Green Energy Ltd. and associated firms, together known as Adani Green Energy Restricted Group 1, advanced by at least 0.55 cents on the dollar to above par on Tuesday, credit traders said. Orders totaled more than $2.65 billion, with nearly half the prospective buyers in Asia and roughly a quarter from the US. 

The popularity of the deal effectively dispels concerns Indian billionaire Gautam Adani’s companies would have a tough time raising dollar funds as a result of Hindenburg’s allegations of malfeasance — which the group denies. 

That leaves the door open to more deals. Its renewable energy unit planned at least $2 billion in mostly new debt in 2024, while Adani Energy Solutions Ltd. is looking to raise roughly $400 million through privately placed bonds, Bloomberg reported last month.  

“The worst is over for them,” said Leonard Law, a senior credit analyst at Lucror Analytics, citing an increase in transparency and deleveraging. “The Adani Green bond sale is a first step for them toward accessing offshore bond markets again.” 

The financial dealings of the tycoon’s empire, whose assets include ports and airports as well as solar energy production, have drawn close scrutiny ever since Hindenburg in 2023 launched one of biggest takedowns ever by a short-seller. 

While Adani repeatedly denied the allegations of fraud and stock manipulation, the claims still triggered a rout in its stocks and bonds. 

They’ve since recouped losses. The vast majority of Adani Group dollar bonds were indicated higher on Tuesday, data compiled by Bloomberg show.

In further evidence of fading investor concerns about the group’s finances, the new bond priced to yield just 6.7%. That’s below the 6.825% that Nomura Holdings Inc. analyst Eric Liu said would be fair value —- a term used to signify where a bond of the same maturity and type might trade. 

What Bloomberg Intelligence Says... 

“Strong demand and tight pricing for Adani Green’s restricted group bonds, which now trade inside BBB- rated Adani Ports, could be due to the bonds’ strong structure. The bonds are ringfenced and backed by projects which are held in a joint venture with TotalEnergies and benefit from a good operational track record    - Sharon Chen, credit analyst 

In response to the Hindenburg crisis, Adani group sought to bolster investor confidence by trimming debt, paring founders’ share pledges, and winning new equity backing from the US and the Middle East. On the debt front, it already signed a $3.5 billion package to refinance debt taken out for the purchase of Ambuja Cements Ltd. and ACC Ltd. 

Proceeds of the new bond will be used to redeem a $500 million note that matures in December. Adani Green has said it has already lined up the funds to pay its $750 million bond due in September. 

(Updates with BI reaction after ninth paragraph)

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