Adani Enterprises Grabs Attention as ₹800 Crore NCD Issue Launches on 4th September 

Shares of Adani Enterprises Ltd are expected to be in the spotlight on Wednesday after the flagship Adani group company's management committee approved a prospectus on August 27. 

This prospectus pertains to a public issue of up to 80,00,000 secured, rated, listed, redeemable, non-convertible debentures (NCDs) with a face value of ₹1,000 each. The total issue size amounts to ₹400 crore, with an option to retain oversubscription up to an additional ₹400 crore, bringing the potential total to ₹800 crore.

This NCD issue marks the first since the allegations by Hindenburg Research last year and is scheduled to run from September 4 to September 17. The secured redeemable NCDs will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), with BSE designated as the primary stock exchange.

In a filing with the BSE, Adani Enterprises indicated that the actual date for the allotment of the NCDs would be determined by the board of directors or the management committee. It was also noted that the allotment might occur on a different date than the deemed date of allotment. All associated benefits, including interest on the NCDs, will be available to debenture holders from the deemed date of allotment.

On Tuesday, Adani Enterprises shares closed at ₹3,067 on the NSE, reflecting a 5% decline over the past six months but a 5% increase for 2024 so far.

The company also stated that the principal amount of the NCDs, along with the interest payable, would be secured by a first-ranking pari passu charge on certain loans and advances in the company's books. A security cover of at least 110% of the outstanding principal and interest will be maintained until the redemption date.

The NCD issue aims to raise ₹400 crore, with the option to extend up to ₹800 crore through oversubscription, as disclosed in an exchange filing.

Interest rates for these NCDs are as follows:

•    Short-term option: 24-month NCDs offering an annual interest rate of 9.25%.
•    Medium-term options: 36-month NCDs with interest rates ranging from 9.32% to 9.65%, depending on the payment frequency.
•    Long-term options: 60-month NCDs providing interest rates between 9.56% and 9.90%.

The highest interest rate offered is 9.90% per annum.

The company confirmed that the Board of Directors initially approved the public issue during a meeting on August 4, 2022. The Management Committee later ratified and adopted the prospectus for the issuance on August 27, 2024. The NCDs will be available for subscription from September 4, 2024, to September 17, 2024, with tenures ranging from 24 to 60 months based on investor preference. Interest payments will be made on an annual, quarterly, or cumulative basis, depending on the specific series of NCDs selected.

Adani Enterprises assured investors that the NCDs would be secured by a first-ranking pari passu charge on specific assets, ensuring a security cover of at least 110% of the outstanding amounts. Additionally, in the event of any payment delays, the company has committed to paying an additional 2% annual interest, as required by law.

Understanding the NDCs and Their Importance

The Paris Agreement, adopted in 2015, set a global framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C. Each signatory country submits its NDCs, which outline the actions they plan to take to achieve these goals. For India, this involves reducing the emissions intensity of its GDP by 33-35% from 2005 levels by 2030, increasing the share of non-fossil fuel-based energy resources to 40% of the total installed capacity, and creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through
While Adani Enterprises has made significant strides in aligning its business with India's NDCs, challenges remain. The transition to a low-carbon economy requires substantial investments in technology, infrastructure, and capacity building. Additionally, balancing economic growth with environmental sustainability is a complex task that requires continuous innovation and collaboration with various stakeholders, including the government, industry, and civil society.

Despite these challenges, Adani Enterprises' commitment to the NDCs demonstrates a clear recognition of the importance of sustainable development. As the company continues to expand its renewable energy portfolio and explore new avenues for reducing carbon emissions, it is set to play a pivotal role in India's journey towards achieving its climate goals.

Adani Enterprises' engagement with the NDCs reflects its broader strategy of integrating sustainability into its core business operations. By doing so, the company is not only contributing to India's climate objectives but also securing its position as a leader in the global energy transition. As the world moves towards a more sustainable future, Adani's efforts in supporting the NDCs will likely serve as a model for other companies in India and beyond.