The Adani Group recently launched its latest round of Non-Convertible Debentures (NCDs), offering investors a chance to earn attractive interest rates amidst a volatile market environment. But is it the right investment for you? Let’s dive in and explore the key details.
What are Adani NCDs?
NCDs are debt instruments issued by companies to raise funds for various purposes, such as expansion, refinancing debt, or working capital needs. Unlike convertible debentures, NCDs cannot be converted into equity shares of the company. They offer fixed interest payments to investors over a specified tenure.
Key Features of the Adani NCD Issue
- Issuer: Adani Enterprises Limited
- Issue Opens On: Wednesday, September 4, 2024
- Issue Close On: Tuesday, September 17, 2024
- Tenure: Multiple options available, ranging from 2 years (36 months) to 5 years (60 months).
- Credit Rating: The NCDs have received credit ratings of A+ by CARE Ratings Limited, indicating their creditworthiness.
- Minimum Investment: The minimum investment amount is ₹10,000, making it accessible to a wider range of investors.
- Lead Manager: Nuvama Wealth Management Limited, A. K. Capital Services Limited and Trust Investment Advisors Private Limited
- Total Issue Size: ₹800 crores
- Base Issue Size: ₹400 crores
- Listing: The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 6 (six) Working Days from the Issue Closing Date. BSE has been appointed as the Designated Stock Exchange.
- Interest Rates: Varying interest rates depending on the chosen option and investor category (retail or institutional). Check the table below.
Quarterly Interest Payment Frequency
| Tenure | 36 | 60 |
| Coupon | 9.32% | 9.56% |
| Effective Yield | 9.65% | 9.90% |
Yearly Interest Payment Frequency
| Tenure | 24 | 36 | 60 |
| Coupon | 9.25% | 9.65% | 9.90% |
| Effective Yield | 9.25% | 9.65% | 9.89% |
Cumulative Payment
| Tenure | 24 | 36 | 60 |
| Effective Yield | 9.25% | 9.65% | 9.90% |
30% of Overall Issue Size is reserved for retail investors.
Should You Invest?
Adani NCDs can be an attractive option for investors seeking stable returns and regular income. The interest rates offered are often higher than those of traditional fixed deposits, making them appealing in the current low-interest-rate environment.
However, it’s important to consider a few factors before investing:
- Credit Risk: Although the Adani Group has a strong track record, it’s crucial to assess the credit rating of the NCDs and understand the associated risks.
- Interest Rate Risk: If interest rates rise in the future, the value of your NCDs could decline in the secondary market.
- Liquidity: While NCDs can be traded in the secondary market, liquidity might be limited compared to other debt instruments.
Who Should Consider Investing?
- Risk-averse investors looking for stable returns and regular income.
- Investors seeking higher interest rates than those offered by traditional fixed deposits.
- Investors looking to diversify their fixed-income portfolio.
How to Invest?
Meta Investment offers complete online investing in this NCD. Connect with us for more details.
Conclusion
Adani NCDs present an opportunity to earn fixed returns in a volatile market scenario. However, it’s essential to evaluate the risks and your investment goals before making a decision. If you’re unsure, consult a financial advisor to assess whether Adani NCDs fit your investment strategy.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in NCDs involves risks, and investors should carefully evaluate the offer document before making any investment decisions.
