Adani Enterprises' debut retail bond sale sees strong demand

Adani Enterprises Ltd.'s maiden bond issuance targeted at individuals received a strong response on first day of opening, another sign that the Indian conglomerate has regained investor confidence following a short seller attack last year.

The issuance by billionaire Gautam Adani's group received subscriptions worth nearly 7.2 billion rupees, compared to a plan to raise 8 billion rupees, according to lead manager Nuvama Wealth Management's website.

The retail segment of the issuance was fully sold on day one as offers worth 2.5 billion rupees were received as compared to 2.4 billion rupees reserved for this category of investors.

The bond sale comes as the conglomerate tries to raise funds from a mix of routes. A strong response for the public issuance is a sign of the group's recovery after Hindenburg Research's report in January 2023 that led to a rout in its shares and bonds.

Since then, the group is back on a growth spree, considering fresh fundraising via a share sale for its flagship unit after selling shares in its power utility. The group has enough cash to cover more than 30 months of debt payments, it said last month as the port-to-power conglomerate tries to alleviate concerns about its liquidity risk.

Demand was high even among high-networth individuals and non-institutional investors such as corporates on day one of the public issuance as subscriptions amounting to 4.6 billion rupees were received, compared to 4.8 billion rupees reserved.

Adani Enterprises is offering bonds due in two-, three- and five years, with yield ranging between 9.25% and 9.90%. At least three quarters of the proceeds will be used to prepay or repay the company's debt, while the rest is for general corporate purposes.

Trust Investment Advisors Pvt. and AK Capital Services are the other lead managers for the public issue, which is slated to close Sept. 17.