Adani Enterprises' NCDs to offer around 9.99% returns, higher than FDs, says Adani CFO

AdGroup CFO Jugeshinder Robbie Singh announced on Thursday that the non-convertible debentures (NCDs) launched by Adani Enterprises (AEL) aim to offer retail investors returns that are higher than those provided by fixed deposits (FDs).

Speaking at a press conference in Ahmedabad, Singh stated, "NCDs are a small start in public debt securities to allow retail investors to get returns higher than FD returns."

He also shared that the effective yield will be around 9.99 per cent with these NCDs. Singh also emphasized the importance of developing a country's infrastructure and energy sectors with domestic capital rather than relying on global funds.

He said, "We are of the fundamental belief, and the evidence around the world shows this, that the core infrastructure and energy of any country has to develop with the capital of that country. It is not appropriate to rely on global capital to build infra and energy."

He further highlighted the need for local ownership of infrastructure and energy assets, stating, "The benefit of our infra and energy assets must be owned in majority by the local people. The wealth effect of infrastructure and energy must remain in the majority with Indian public. And so right across the capital chain, we will introduce products, and we will continue to enhance these products so that the Indian public can participate in a meaningful way."

Singh also noted that public debt outside of government and financial institutions is very limited in India, contrasting this with the situation in mature, developed markets around the world.

Adani Enterprises (AEL) on Thursday announced the launch of its maiden public issuance of secured, rated, listed redeemable, non-convertible debentures.

The company stated that the non-convertible debentures (NCDs) proposed to be issued under the Issue have been rated "CARE A+; Positive (Single A Plus; Outlook: Positive) by CARE Ratings Limited. Securities with these ratings are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.

AEL's offering will include up to 80,00,000 non-convertible debentures ("NCDs" or "Debentures"), each with a face value of Rs 1,000.

The base size issue is Rs 400 crore, with an option to retain over-subscription up to an additional Rs 400 crore ("Green Shoe Option") aggregating up to Rs 800 crore ("Issue" or "Issue Size"). The company added that the Issue will open on September 04, 2024, and close on September 17, 2024, with an option of early closure or extension.

As per a statement by the company, the minimum application size for each application for NCDs would be Rs 10,000 across all series collectively and in multiples of Rs 1,000 thereafter.

The proceeds from the Issue will be utilized primarily towards the prepayment or repayment, in full or in part, of the existing indebtedness availed by our Company (at least 75 per cent) and general corporate purposes (up to 25 per cent) in compliance with the Securities and Exchange Board of India (Issue And Listing of Non-Convertible Securities) Regulations, 2021, as amended from time to time ("SEBI NCS Regulations").

The company also added that Trust Investment Advisors Private Limited, A.K. Capital Services Limited and Nuvama Wealth Management Limited are the Lead Managers to the Issue.