In a major development for the conglomerate, Adani Enterprises’ first retail bond issue was fully subscribed on the opening day on Wednesday, according to stock exchange data. This is a rare development in the market and by a non-financial company.
The bond issue, of up to Rs 800 crore with an option to retain oversubscriptions of an equivalent amount, which is the stock call option, had already received bids for Rs 717 crore by 5 pm on the launch day. This strong demand underlines the renewed confidence in the Adani Group Despite all the turbulence it faced earlier this year, when US short-seller Hindenburg Research accused the conglomerate of using offshore tax havens and artificially influencing share prices, the allegations, which Adani repeatedly denied, ended up leading to a $150 billion erosion in the group’s market value. But now, apparently after that recovery in share prices, Adani seems to be emboldened enough to return to the capital markets.
This is also a one-of-a-kind bond issue because it gauges retail investor appetite following a succession of fundraising efforts by institutional investors. In July, Adani Energy Solutions raised $1 billion through institutional stake sales and, according to Reuters, Adani Enterprises plans to raise another $1 billion through share sales.
People familiar with the bond sale said subscription is in line with expectations, largely driven by retail investors and HNIs. The issue, rated A+ by CAREdge, offers coupons in the range of 9.25 per cent to 9.9 per cent for tenors between 24 and 60 months, slightly lower than the 10-11 per cent yields that similarly rated non-banking financial companies typically offer.
Adani Enterprises has been aggressively promoting the bond issue through webinars and social media along with its lead arrangers, Trust Investment Advisors, AK Capital Services and Nuvama Wealth Management, besides various online platforms where retail investors can subscribe to the issue. The subscription period for the bond closes on September 17.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.