Adani Enterprises Limited- A Look into Bond Public Issue

Adani Enterprises Limited is coming up with Secured, Rated, Listed, Redeemable Non-Convertible Debentures on 04, September 2024  which is closing on 17, September 2024. Rated A+/ Positive by Care, it presents an attractive investment opportunity for investors,  with a minimum investment of just Rs.10,000. This blog provides a summary of the company, the bond issue, and its financial performance. Given below are the details of the issue.
Issue Highlights

Issuer Name
Adani Enterprises Limited

Nature of Instrument
Secured Rated Listed Redeemable Non-Convertible Debentures

Rating
A+ / Positive by CARE

Seniority
Senior Secured

Face Value
Rs. 1,000 per NCD

Base Issue Size
Rs. 400 crore  

Option to retain oversubscription
Rs. 400 crore

Highest yield 
Up to 9.90%

Tenor
24/36/60/ months

Issue Date
September 04, 2024, to September 17, 2024

Minimum Investment
Rs. 10,000 only

Allotment- FIRST COME FIRST SERVE BASIS
Terms of the Issue:

About the Company

Adani Enterprises Limited (AEL) is a part of the Adani Group, which is a top business house, known for its successful execution of large-scale projects in the energy and infrastructure sectors in India.  
AEL is renowned for being India’s largest listed business incubator, focusing on four core sectors: energy and utility, transportation and logistics, consumer goods, and primary industry.
Since its inception, AEL has successfully incubated and listed six highly successful companies, including Adani Ports and Special Economic Zone Limited, Adani Power Limited, Adani Energy Solutions Ltd., Adani Green Energy Limited, Adani Total Gas Limited, and Adani Wilmar Limited. 
As of June 30, 2024, the Adani portfolio had a market capitalization of ₹16,200 billion (approximately US$ 194 billion) and is one of the largest listed groups by market capitalization in India.

The business portfolio of AEL is as follows: 

Key Operational and Financial Parameters (Standalone)

Particulars
FY 2024
FY 2023
FY 2022

Net worth
16,639.54
13,933.78
5,240.66

Total  Income
33,679.15
59,151.19
22,203.66

Profit for the period
2,843.03
1,613.77
642.43

Return on Equity
17.09%
11.58%
12.26%

Debt Equity Ratio
0.34
0.21
0.81

Net Debt / EBITDA (times)
0.81
0.47
1.81

Competitive Strengths
Several key factors have contributed to the growth and expansion of the company.

AEL is a business incubator with a proven track record of nurturing sustainable infrastructure businesses in India, focused on enhancing stakeholder value.

AEL is one of India’s largest listed business incubators in terms of market capitalization with established and developing businesses that cater to the needs of India. It started its operations in 1993 and incubated the ports business in 1998. Since then it has expanded its business across many industry verticals including energy and utilities, transport and logistics, primary industry, and consumer.

Proven track record and experience in project execution and management.

AEL has built numerous companies across various infrastructure sectors and has developed a unique specialization in project execution. The company focuses on India’s underdeveloped infrastructure sector which has high growth potential.

Airport assets of national significance are strategically positioned and benefit from a stable regulatory framework and concession agreements.

India’s real GDP growth is projected to be 6.8% year-on-year in CY 2024. Adani’s airports are situated in regions that have experienced rapid economic growth recently. Moreover, all its airports are city-centric locations, primarily in the capital cities of major Indian states.

Seasoned promoters and robust leadership

AEL’s leadership team is led by Gautam S. Adani and Rajesh S. Adani and is supported by an experienced senior management group. The team has decades of collective experience spanning mining services, manufacturing, green hydrogen, water management, airports, roads, FMCG, and digital offerings. The highly experienced professional management team gives a significant competitive advantage.

Scalable financial structure and proven performance

AEL has built a strong financial base with both owned and borrowed funds, enabling it to secure resources from lenders at favorable rates. The company has shown consistent revenue and profitability growth. Its consolidated revenue from operations reached ₹25,472.40 crores for the quarter ending June 30, 2024.
Source: Information Memorandum
Investor Categories 
The investor categories in a bond public issue are the different segments or types of investors who can take part in the offering. The allocation ratio is allocated by the issuer based on the guidelines framed by regulatory bodies such as SEBI, to distribute the existing bonds among different sets of investors. Here is the allocation ratio for Adani Enterprises Limited Public Issue across these investor categories.
Category I– Institutional Portion– 10% of the overall issue size- Public Financial Institutions, Insurance companies, Scheduled Banks, Provident Funds, AIFs, etc.
Category II– Non-institutional Investors- 30% of the overall issue size- Companies, Co-operative Banks, Trusts, Partnership Firms, Association of Persons, etc.
Category III– High Net-worth Individual Investors– 30% of the overall issue size- Resident Indian individuals or Hindu Undivided Families through the Karta applying for an amount aggregating to above Rs. 10,00,000 across all options of NCDs in the Issue.
Category IV– Retail– 30% of the overall issue size- Resident Indian Individuals or Hindu Undivided Families through Karta applying for an amount aggregating up to and including Rs. 10,00,000.   

How to Apply through TheFixedIncome? 
Investors can easily apply using the following three steps:
How to Apply through_TheFixedIncome.com
Information Memorandum:
An Information Memorandum (IM) is a comprehensive document furnishing investors with in-depth information about the bond offering. It provides detailed information about the issuer’s business, financial background, management team, details of offerings, associated investment risks, and fund allocation from the issue, besides regulatory and legal disclosures.
The link to the Information Memorandum of bond public issue of Adani Enterprises Ltd. is given below:
https://www.thefixedincome.com/storage/bondprimary_imfiles/1724833522ADANIENTERPRISESLIMITEDIM.pdf
Conclusion
Wrapping up, the bond public issue by Adani Enterprises Limited offers an attractive opportunity for investors interested in investing in Secured Rated Listed Redeemable Non-Convertible Debentures. Investors can seize this opportunity and enjoy the returns of this public issue. However, it is advisable that before investing, investors must go through the IM thoroughly and assess their risk appetite and investment objectives.
Disclaimer: This article is based on publicly available information and other sources believed to be reliable. The information provided in this article is intended for general, educational, and awareness purposes only and should not be considered a comprehensive disclosure of every material fact. It should not be interpreted as investment advice for any individual or entity. The article makes no guarantees regarding the completeness or accuracy of the information and disclaims all liabilities, losses, and damages arising from the use of this information. Investments in the debt market are subject to market risk, kindly read all the documents carefully.