By Shankar Ramakrishnan and Bhakti Tambe

March 5 (Reuters) - India's Adani group saw massive

demand on Monday for its first dollar bond since a short-seller

attack last year, in what two banking sources said was being

seen internally as a test for the conglomerate's access to

global capital markets.

Adani Green Energy priced a $409 million 18-year

bond after receiving nearly $3 billion of demand for it, said

the sources, who have direct knowledge of the deal.

The issuer received bids from 163 investors, of which, 45%

were from Asia, 24% from the United States, 21% from Europe and

the rest from the Middle East, a company source told Reuters on

Tuesday, requesting anonymity as they were not authorized to

speak to the media.

Adani Green's bonds paid a yield of 6.7%, 42.5 basis points

cheaper than levels initially proposed when the deal was

announced this morning, thanks to the strong demand.

The final coupon pricing was sharply below the fair value

seen by CreditSights at 7.45% and also lower than Nomura's

6.8250%.

Analysts at CreditSights had noted that the bonds were

likely to generate strong demand given the lack of high-yield

paper in the Asian U.S. dollar bond market and the enthusiasm

for Indian renewable infrastructure credit.

Nomura did not factor in any new issuer premium on Adani

Green's bond issue considering the muted supply of Asian high

yield bonds and the stronger than expected bond performance of

the latest bond offering by IRB Infrastructure Developers, it

said in a note.

Other operating companies in the group could follow with

bond issues after seeing robust demand, the first source said.

Adani Energy Solutions is planning to raise around $400

million-$500 million through a private placement of bonds for

which it is in early talks with U.S. institutional investors,

Reuters reported last week.

The board of Adani Green Energy has approved the

above-mentioned pricing, tenure and the other terms of the bond

issue, it informed Indian exchanges on Tuesday.

Adani group company stocks and bonds saw a massive selloff

early last year after U.S. short seller Hindenburg Research

issued a report that alleged improper governance practices,

stock manipulation and use of tax havens by the Adani Group. The

group has denied these allegations.

In the aftermath of the selloff Adani executives and

advisers launched a charm offensive with investors globally,

according to the bankers.

The proceeds from the bond issue will be used by the company

to repay $500 million of senior unsecured notes that mature in

June.

The bonds are rated 'Ba1' by Moody's Investor Service and

'BBB-' by Fitch Ratings.