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Adani Enterprises raises Rs 1,250 cr with first rupee bond market foray since Hindenburg report

Adani Enterprises

Adani Group’s main business, Adani Enterprises Ltd, has raised Rs 1,250 crore in the Indian corporate bond market for the first time since the Hindenburg report in January. 

The company raised Rs 1,250 crore on Tuesday by selling three-year bonds with a 10% annual coupon, according to data from the National Securities Depository Ltd obtained by Reuters on Wednesday. 

This is Adani Group’s first excursion into the rupee bond market since January, when a scathing report by a US-based short-seller prompted a rout in the group’s assets, but it had to pay a higher rate to obtain cash. 

Adani Enterprises announced on Tuesday that it obtained Rs 1,250 crore through the private offering of non-convertible debentures. 

The bonds were offered at a yield of 10%, representing an approximately 300 basis point premium above the similar government bond yield. In contrast to government bonds, which pay a semi-annual rate, the bonds will pay an annual yield. 

The company previously raised capital through a primary offering of bonds in September 2022 at an 8.4% yield for 17 months, 140 basis points more than the prevailing government bond yields at the time. However, the eventual return of this issuance is tied to the performance of the 10-year benchmark bond rate during redemption. 

Adani Enterprises

In the secondary markets prior to the Hindenburg report, Adani Enterprises’ notes were trading at a rate of 9.05%, a 210 basis point spread over comparable government bond yields. 

The Hindenburg report accused the Adani firm of illegal governance practises, stock manipulation, and the use of tax havens, which the coal-to-airports firm categorically rejected, prompting regulatory attention and a sell-off across the group’s listed entities. 

 The equities have somewhat recovered since then, particularly after a Supreme Court panel in May stated that India’s markets watchdog has “drawn a blank” in inquiries into possible violations of international investments in the firm thus far. 

According to NSDL records, Adani Enterprises raised the new debt by pledging 21.4% of Adani Road Transport’s shares. During its September bond issue, it pledged 1.95% of Adani Road Transport’s shares. 

The unrated bond offering began and closed on Tuesday and was placed directly with investors rather than through merchant bankers, as is customary.