All about Non-Convertible Debentures (NCDs) and how Adani Enterprises is using them?
The Adani Enterprises Ltd – the flagship company of the Adani group of companies – is to tap up to Rs 800 crore through the instruments NCDs. The NCDs have been accorded a CARE A+; positive’ indicating low credit risk, the company stated.
Table of Contents
What Activities Are Falling under This Heading?
About one-half of the amount that will be generated from the financing activities will be used to repay the existing facility or a portion of such facility either in full or in part. The remaining up to 25% will be directed to other general corporate requirements which will enhance the financial flexibility of the company and address other expenses incurred in the course of its operations.
What does the NCD issue look like?
For financing the project Adani Enterprises will issue up to 80,00,000 Non – Convertible Debentures of Rs 1,000 each. The issue is expected to open on the 4th of September while the closing date is September 17 depending on the market subscription levels; however, there might be early closure or even an extension of the dates.
That Being the Case, what are the Investment Terms?
The minimum application amount is Rs 10,000 and over this in multiple of Rs 1,000. The NCDs are offered with tenors of 24, 36, and 60 months. To cater to the investors’ diverse needs, there are offered quarterly, cumulative, and annual interest payment options within eight series.
Why this NCD issue should be considered by Investors?
The NCDs from Adani Enterprises are relatively less risky investments and secured as evidenced by the CARE credit rating. Also, the fact that there is a great deal of flexibility over the tenor for investments and the manner of paying interest fosters investors of different categories to invest in it.
This particular fundraising by Adani Enterprises is as follows, the top Indian conglomerate aims to cut down its debt and yet sustain healthy and sound financial health for its business. Even the possibility of using part of the funds for other corporate purposes also evidences rational financial management for the growth of the company.
Key Takeaways for Investors:
- Low Credit Risk: This hotel is more brightly lit and has been benchmarked as “CARE A +; positive. ”
- Multiple Tenors: 24, 36, and sixty months
- Flexible Interest Payment Options: The former includes quarterly, cumulative, and annual frequency while the latter is a monthly indexing approach.
- Minimum Investment: Rs 10,000
- Anyone interested in investing in Adani Enterprises’s NCD issue should do so because this NCD issue offers a mix of security and high returns.
