Adani Enterprises Ltd, the flagship arm of Adani Group, has made its first foray into the Indian corporate bond market since the Hindenburg report in January. The company successfully raised Rs 1,250 crore by selling three-year bonds with an annual coupon rate of 10%.

Key Points

Bond Market Foray

Adani Enterprises Ltd returns to the Indian corporate bond market after the Hindenburg report.

Fundraising Details

The company raised Rs 1,250 crore through the sale of three-year bonds with a 10% annual coupon rate.

Previous Issuances

Adani Enterprises previously raised funds in September 2022 at an 8.4% yield and a spread of 140 basis points over government bond yields.

Impact of Hindenburg Report

The Hindenburg report led to a sell-off across Adani Group’s listed entities, but the stocks have partially recovered since then.

Current Bond Ratings

Adani Enterprises’ outstanding bonds are rated A+ by Care Ratings, while India Ratings has an A+ rating for a proposed public issue.

Details

Background

Adani Enterprises Ltd, the flagship arm of Adani Group, has made its first foray into the Indian corporate bond market since the Hindenburg report in January. The report made allegations of improper governance practices, stock manipulation, and use of tax havens by the Adani Group, which the company has denied. The allegations led to regulatory scrutiny and a sell-off in the group’s listed entities.

Fundraising

On Tuesday, Adani Enterprises raised Rs 1,250 crore by issuing three-year bonds with an annual coupon rate of 10%. The bonds were issued at a spread of nearly 300 basis points over the comparable government bond yield. The company had to pay a higher rate to raise funds compared to its previous issuances.

Market Response

In January, before the Hindenburg report, Adani Enterprises’ bonds were traded at a yield of 9.05%, with a spread of 210 basis points over similar government bond yields. Since then, the stocks have partially recovered, especially after a Supreme Court panel stated that India’s markets watchdog has found no violations of overseas investments in the group so far.

Investor Base

The new bonds were subscribed by family offices, corporates, and alternative investment funds. The unrated bond issue was directly placed with investors, bypassing the involvement of merchant bankers.

Bond Ratings

Adani Enterprises’ current outstanding bonds are rated A+ by Care Ratings. India Ratings has assigned an A+ rating to a proposed public issue by the company, which has not yet been launched.

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