Adani Enterprises first retail bond fully subscribed on strong demand

In a major development for the conglomerate, Adani Enterprises' first-ever retail bond issue was fully subscribed on its opening day Wednesday, according to stock exchange data. This is a rare development to take place in the market and by a non-financial company.

The bond issue, of up to Rs 800 crore with an option to retain oversubscriptions of an equivalent amount, which is the greenshoe option, had already got Rs 717 crore in bids by 5:00 PM on the launch day. This strong demand underlines renewed confidence in the Adani Group despite all the turbulence it had been facing at the beginning of this year, when US short-seller Hindenburg Research accused the conglomerate of using offshore tax havens and artificially influencing stock prices. The allegations, which Adani repeatedly denied, eventually saw a $150 billion erosion in the market value of the group. But now, apparently after that recovery in share prices, Adani seems to be emboldened enough to get back into the capital markets.

It's also a unique bond issuance of its type because it gauges retail investor appetite following a succession of fundraising efforts from institutional investors. In July, Adani Energy Solutions raised $1 billion through the institutional share sale, and Adani Enterprises is reportedly planning to raise another $1 billion through the sale of shares, according to Reuters.

People familiar with the bond sale said the subscription is in line with expectations, driven largely by retail investors and HNIs. The issue-rated A+ by CAREdge-offers coupons in the range of 9.25 per cent to 9.9 per cent for tenors between 24 and 60 months, slightly lower than the 10-11 per cent yields that similarly rated non-bank finance companies typically offer.

Adani Enterprises has been aggressively marketing the bond issue through webinars and social media along with its lead arrangers, Trust Investment Advisors, AK Capital Services, and Nuvama Wealth Management, besides various online platforms where the retail investors could subscribe to the issue. The subscription period for the bond closes on September 17.