Adani Group’s New Investment Opportunity: Higher Returns for Retail Investors
Adani Group CFO Jugeshinder Robbie Singh announced the launch of non-convertible debentures (NCDs) by Adani Enterprises (AEL) aimed at offering retail investors returns higher than fixed deposits (FDs). Speaking at a press conference in Ahmedabad, Singh stated, “NCDs are a small start in public debt securities to allow retail investors to get returns higher than FD returns.”
He shared that the effective yield will be around 9.99 per cent with these NCDs. Singh emphasized the importance of developing a country’s infrastructure and energy sectors with domestic capital rather than relying on global funds. He said, “We are of the fundamental belief, and the evidence around the world shows this, that the core infrastructure and energy of any country has to develop with the capital of that country. It is not appropriate to rely on global capital to build infra and energy.”
Singh highlighted the need for local ownership of infrastructure and energy assets, stating, “The benefit of our infra and energy assets must be owned in majority by the local people. The wealth effect of infrastructure and energy must remain in the majority with Indian public. And so right across the capital chain, we will introduce products, and we will continue to enhance these products so that the Indian public can participate in a meaningful way.”
Adani Enterprises (AEL) announced the launch of its maiden public issuance of secured, rated, listed redeemable, non-convertible debentures. The NCDs proposed to be issued have been rated “CARE A+; Positive (Single A Plus; Outlook: Positive)” by CARE Ratings Limited, indicating a low credit risk.
The offering will include up to 80,00,000 NCDs, each with a face value of Rs 1,000. The base size issue is Rs 400 crore, with an option to retain over-subscription up to an additional Rs 400 crore, aggregating up to Rs 800 crore. The Issue will open on September 04, 2024, and close on September 17, 2024, with an option of early closure or extension.
The minimum application size for each application for NCDs would be Rs 10,000 across all series collectively and in multiples of Rs 1,000 thereafter. The proceeds from the Issue will be utilized primarily towards the prepayment or repayment, in full or in part, of the existing indebtedness availed by the Company (at least 75 per cent) and general corporate purposes (up to 25 per cent) in compliance with the Securities and Exchange Board of India (Issue And Listing of Non-Convertible Securities) Regulations, 2021.
Trust Investment Advisors Private Limited, A.K. Capital Services Limited, and Nuvama Wealth Management Limited are the Lead Managers to the Issue.
Doubts Revealed
Adani Group -: Adani Group is a big company in India that works in many areas like energy, resources, logistics, and more. They help build important things like power plants and ports.
CFO -: CFO stands for Chief Financial Officer. This person is in charge of managing the money and finances of a company.
Jugeshinder Robbie Singh -: Jugeshinder Robbie Singh is the Chief Financial Officer (CFO) of Adani Group. He helps make important financial decisions for the company.
Non-convertible debentures (NCDs) -: Non-convertible debentures (NCDs) are a type of loan that people can give to a company. In return, the company promises to pay back the money with interest, but these loans cannot be changed into company shares.
Retail investors -: Retail investors are regular people who invest their own money in things like stocks, bonds, or NCDs, hoping to earn more money.
Fixed deposits -: Fixed deposits are a type of savings account in banks where you keep your money for a fixed period and earn interest on it. They are considered very safe but usually offer lower returns.
Infrastructure -: Infrastructure means the basic physical systems of a country, like roads, bridges, and power supply, which are necessary for the country to function well.
Energy sectors -: Energy sectors are parts of the economy that produce and supply energy, like electricity and fuel, which are essential for running homes, businesses, and factories.
Domestic capital -: Domestic capital means money that comes from within the country, not from other countries. It is used to invest in projects and businesses inside the country.
Debt repayment -: Debt repayment means paying back the money that a company or person has borrowed. Companies often borrow money to grow their business and then pay it back over time.
General corporate purposes -: General corporate purposes are the usual activities a company needs money for, like paying employees, buying materials, or expanding the business.