In a move that has caught the attention of retail and institutional investors alike, Adani Enterprises has announced its second public Non-Convertible Debentures (NCD) issue, aiming to raise up to ₹1,000 crore. This new offering, coming amid rising interest in fixed-income instruments, highlights the company’s continued strategy to diversify funding sources while offering investors a solid alternative to traditional investment avenues.
This article will explore everything you need to know about the Adani Enterprises NCD issue, including what NCDs are, why they matter, key details of the offer, and whether this could be the right investment for you.
What Is an NCD and Why Are Companies Issuing Them?
Before diving into Adani’s specific announcement, let’s first understand what an NCD is. A Non-Convertible Debenture (NCD) is a fixed-income financial instrument used by companies to raise long-term capital. These are debt securities that cannot be converted into equity shares of the issuing company.
Companies like Adani Enterprises use NCDs to raise funds for infrastructure projects, business expansion, or to refinance existing debts. For investors, NCDs are attractive because:
- They offer fixed returns, often higher than bank fixed deposits.
- They may carry credit ratings, which help assess risk.
- Some NCDs are listed on stock exchanges, offering liquidity.
Overview of the Adani Enterprises NCD Issue
This is Adani Enterprises’ second NCD issue in the public market, reflecting the company’s confidence in retail investor participation and its solid reputation in the corporate bond space.
Key Details of the Offer:
| Feature | Details |
|---|---|
| Issuer | Adani Enterprises Limited |
| Issue Size | ₹1,000 crore (base issue ₹500 crore + ₹500 crore green shoe option) |
| Type | Secured, Rated, Listed, Redeemable NCDs |
| Face Value | ₹1,000 per NCD |
| Minimum Application | ₹10,000 (10 NCDs) |
| Tenure Options | Multiple options, including 3-year, 5-year, and 10-year tenures |
| Coupon Rate | Likely to range between 8.5% – 9.5% (final rates to be confirmed) |
| Credit Rating | Likely to receive high rating from CARE and CRISIL |
| Listing | Expected to be listed on BSE and NSE |
| Mode of Allotment | Demat only |
Why Is Adani Enterprises Issuing NCDs Again?
The ₹1,000 crore NCD issue is part of Adani Enterprises’ strategic effort to optimize capital structure and fund its growing pipeline of infrastructure and energy projects. The Adani Group has been aggressively investing in areas like renewable energy, airports, roads, and data centers.
With this public issue, the company is:
- Diversifying its funding base beyond traditional loans.
- Lowering overall financing costs by tapping into retail and HNI (High Net-worth Individual) investors.
- Offering a stable and attractive return proposition in a volatile market environment.
The response to the previous NCD issue was overwhelmingly positive, prompting the company to return with a second offer so soon.
Who Should Consider Investing in This NCD?
The Adani Enterprises NCD issue is designed to appeal to a wide range of investors looking for predictable income and relative safety. Here’s a breakdown of who might benefit:
Retail Investors
- Seeking better-than-FD returns
- Comfortable with locking in money for 3–10 years
- Looking for regular income via interest payouts
HNIs and Institutional Investors
- Interested in diversifying portfolios
- Looking for tax-efficient options in Demat form
- Seeking exposure to high-rated debt instruments from established corporates
Things to Watch Out For
- NCDs are not risk-free. Though secured and rated, there’s always credit and liquidity risk
- Unlike FDs, NCD interest is fully taxable, depending on your tax slab
Credit Ratings: What Do They Mean?
Adani Enterprises’ NCDs are expected to receive high ratings from agencies like CARE Ratings and CRISIL, likely in the AA or AA+ range. Here’s what that means:
- AA+ Rating: High degree of safety regarding timely servicing of debt
- AA Rating: Adequate safety, though slightly more susceptible to adverse economic changes
While a high credit rating does not guarantee safety, it reduces the risk significantly compared to unrated or low-rated instruments.
Market Trends: Why Now?
The announcement of this NCD issue comes at a time when:
- Interest rates are relatively stable
- Stock markets are showing volatility, pushing investors towards fixed-income securities
- Retail participation in corporate bonds and debt markets is growing steadily
According to data from SEBI and RBI, the Indian corporate bond market has been witnessing an upward trend in participation, especially after the pandemic. More retail investors are now open to investing directly in corporate NCDs due to higher returns and easier access via online platforms.
Comparison With Other Investment Options
| Investment Option | Expected Returns | Liquidity | Risk Profile |
|---|---|---|---|
| Bank Fixed Deposit | 6–7% | High | Very Low |
| Mutual Funds (Debt) | 5–8% | High | Moderate |
| Stock Market | Variable | High | High |
| Adani Enterprises NCD | 8.5–9.5% (est.) | Moderate (if listed) | Low to Moderate (credit risk) |
If you’re someone looking for predictable, above-average returns, the NCD route offers an attractive middle ground between fixed deposits and equity investments.
How to Apply for the Adani NCD Issue
Investors can apply through Demat accounts via:
- Online platforms like Zerodha, Groww, Upstox
- Banking platforms offering ASBA facility
- Financial advisors or brokers registered with BSE/NSE
Steps to Apply:
- Log in to your brokerage or bank account
- Go to the NCD/IPO/Bond section
- Select “Adani Enterprises NCD” from the list
- Choose the series (tenure and payout option)
- Enter quantity and confirm application
Allocation is generally on a first-come, first-served basis, especially for retail investors. Make sure to apply early once the issue opens.
Expert Opinion: Is This a Good Time to Invest?
Financial advisors are generally positive about this offering, particularly for:
- Conservative investors seeking capital protection and income
- Retirees looking for stable returns
- Portfolio diversification into non-equity assets
However, experts also advise that no more than 15-20% of your portfolio should be allocated to corporate NCDs, even if they are highly rated. It’s best to spread your risk across asset classes.
Final Thoughts: A Strategic Move by Adani Enterprises
The Adani Enterprises NCD issue is not just a fundraising activity—it’s a clear signal of the company’s strong financial standing and its growing focus on retail investor participation.
With promising interest rates, credible ratings, and a strong issuer brand, the offer could be a win-win for both the company and investors. That said, like any investment, it’s essential to assess your risk appetite, lock-in preferences, and tax implications before making a decision.
As the debt market becomes more democratized, initiatives like this are likely to pave the way for deeper financial participation in India’s growth story.
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