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

Adani Group's flagship arm Adani Enterprises Ltd has returned to the Indian corporate bond market for the first time since Hindenburg report in January to raise Rs 1,250 crore.

The company raised Rs 1,250 crore on Tuesday by selling three-year bonds with an annual coupon of 10%, data from the National Securities Depository Ltd showed on Wednesday, reported Reuters.

This is Adani Group's first rupee bond market foray since January when a US-based short-seller's scathing report sparked a rout in the group's securities, but had to pay a higher rate to raise funds.

Adani Enterprises said on Tuesday it raised Rs 1,250 crore via allotment of non-convertible debentures on private placement basis.

At a yield of 10%, the bonds were issued at a spread of nearly 300 basis points over the comparable government bond yield. The bonds will pay interest annually as opposed to government bonds which pay a semi-annual yield.

The company had last raised funds via a primary placement of bonds in September 2022 at an 8.4% yield for 17 months, 140 basis points above the prevailing government bond yields at the time. The final return of this issue, however, is linked to the performance of the 10-year benchmark bond yield during redemption.

In the secondary markets, Adani Enterprises' bonds were traded at a yield of 9.05% in January before the Hindenburg report, which was a spread of 210 bps over similar government bond yields.

The Hindenburg report alleged improper governance practices, stock manipulation and use of tax havens by the Adani Group, which the coal-to-airports group has outrightly denied, and led to regulatory scrutiny and a sell-off across the group's listed entities.

The stocks have partially recovered since then, especially after a Supreme Court panel in May said India's markets watchdog has "drawn a blank" in investigations into suspected violations of overseas investments in the group so far.

Adani Enterprises raised the new debt by pledging 21.4% of the shares of Adani Road Transport, NSDL data showed. It had pledged 1.95% of Adani Road Transport's shares during its September bond issue.

The unrated bond issue opened and closed on Tuesday and was directly placed with investors rather than the usual practice of going through merchant bankers.

The bonds have been subscribed by family offices, some corporates and alternative investment funds, merchant bankers that are not involved in the deal said.

Adani Enterprises' current outstanding bonds are rated A+ by Care Ratings, while India Ratings had an A+ rating for a proposed public issue that has not yet been launched.

In May, Adani Enterprises said its board approved the proposal to raise Rs 12,500 crore through share sale.