Adani Enterprises Limited has rolled out a public issue of secured, rated, listed, and redeemable non-convertible debentures (NCDs), each valued at ₹1,000. This issuance aims to initially raise ₹400 crore, with the potential to expand up to ₹800 crore through a green shoe option, as per a recent exchange filing. For those looking to invest in the share market, this NCD issue presents an intriguing opportunity, offering a mix of short-, medium-, and long-term investment options.
Understanding the NCDs: Interest rates and tenure options
Adani Enterprises' NCD issue provides various tenure options, catering to different investment strategies. For investors interested in the share market who seek short-term returns, the company offers 24-month NCDs with an annual interest rate of 9.25%. This option could appeal to those who prefer quicker returns while still benefiting from a relatively high interest rate.
For those looking at a medium-term investment, Adani Enterprises provides 36-month NCDs with interest rates ranging from 9.32% to 9.65%, depending on the chosen payment frequency. These rates offer a balance between short-term gains and long-term security, making them an attractive choice for share market investors looking to diversify their portfolios.
For long-term investors, the company offers 60-month NCDs with interest rates between 9.56% and 9.90%. These rates provide a solid return for those willing to commit their capital for a longer duration, making it a compelling option for those who prefer to invest in the share market with a long-term perspective.
Adani Enterprises' NCDs offer a maximum interest rate of 9.90% per annum, making these debentures an appealing option for those exploring different avenues to invest in the share market. With competitive interest rates and varied tenure options, this NCD issue presents a valuable opportunity for both seasoned and new investors.
Market context and Adani Enterprises' position
As of August 28, Adani Enterprises' share price was down by 0.60%, trading at ₹3,048.50 on the BSE at 9:41 AM. Despite this slight dip, the company continues to hold a robust market capitalisation of ₹3,47,466.64 crore. For those who invest in the share market, understanding the broader financial context of the issuing company is crucial. Adani Enterprises, being a major player in various sectors, offers a strong foundation for investors considering this NCD issue.
The company's Board of Directors initially approved the public issue during a meeting on August 4, 2022. The Management Committee further ratified this decision on August 27, 2024, where they adopted the final prospectus for the issuance. The debentures will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), with the BSE designated as the primary exchange. This dual listing provides added liquidity for those who choose to invest in the share market through these NCDs.
Subscription details and security measures
The NCD issuance will be open for subscription from September 4, 2024, until September 17, 2024. Investors who want to invest in the share market have the flexibility to choose debentures with tenures ranging from 24 to 60 months, depending on their financial goals and risk tolerance. Interest payments will be made on an annual, quarterly, or cumulative basis, depending on the specific series of NCDs selected by the investor.
Adani Enterprises has taken steps to reassure investors about the security of their investment. The company has confirmed that a first-ranking pari-passu charge on specific assets will secure both principal and interest payments. This security cover will be at least 110% of the outstanding amounts, providing a safety net for those who decide to invest in the share market through these NCDs.
Additionally, in the event of any payment delay, Adani Enterprises has committed to paying an additional interest rate of 2% per annum, as required by law. This extra measure adds a layer of protection for investors, making the NCD issue an even more attractive option for those who want to invest in the share market with confidence.
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