A non-convertible debenture is a fixed-income instrument that pays periodic interest and cannot be converted into equity.

Why has Adani Enterprises raised ₹1,000 crore?

To repay existing high-cost debt (75% of proceeds) and finance general corporate needs (25%).

What does a credit rating of 'AA' mean?

An 'AA' rating indicates very low credit risk, just one notch below 'AAA'.

Is a 9.30% yield attractive?

Yes. It's higher than most bank FDs (6.5–7.5%) and government bonds (~6.8%), reflecting risk premium over AAA-rated debt.

What is meant by 'earmarked for prepayment'?

It means reserving funds to repay existing loans early, reducing the outstanding debt and interest burden.

How is the net debt/EBITDA ratio calculated?

Net debt divided by EBITDA gives a leverage ratio—they reported 2.9×, up from 2.3× year-on-year.

Who can invest in this NCD issue?

Retail and institutional investors. Minimum application is 10 NCDs (₹10,000).

What are the key risks?

Rising leverage, interest-rate volatility, and broader group leverage exposure.

When does the issue open and close?

The issue opens July 9, 2025, and closes July 22, 2025.

What was the response to the prior NCD issuance?

The prior ₹800 crore issue was fully subscribed on the first day, demonstrating strong investor demand.

AI Overview: Adani Enterprises' ₹1,000 Crore NCD Issue

By BizNewsDaily • Published: July 8, 2025

What You Need to Know

Issuer & Size: Adani Enterprises Ltd is raising ₹1,000 crore via non‑convertible debentures (NCDs).
Purpose: 75% of proceeds earmarked for prepayment of existing debt; remaining for general corporate needs.
Terms: Up to 9.30% yield, maximum 60‑month tenor, rated 'AA' (stable).
Context: Net external debt jumped from ₹30,966 crore to ₹49,306 crore in one year; net debt/EBITDA rose from 2.3× to 2.9×.
Market Signal: Prior ₹800 crore NCD fully subscribed on Day 1; reflects strong investor appetite.

1. Background & Context

Adani Enterprises Ltd (AEL), the flagship operating arm of the Adani Group, faces rising leverage: its net external debt surged ~59% year‑on‑year, pushing its net debt/EBITDA ratio to 2.9×. To address high‑cost borrowings and diversify its funding mix, AEL has launched a ₹1,000 crore NCD issue, opening July 9 and closing July 22, 2025.

2. Key Terms Explained

Non‑Convertible Debentures (NCDs): Debts that pay fixed interest and cannot convert into equity. Learn more.
Yield (up to 9.30%): Annual return on investment—competitive against FDs (~6.5–7.5%) and government bonds (~6.8%).
Credit Rating 'AA' (stable): Indicates very low credit risk (just below AAA).
Tenor: Maximum of 60 months (5 years).
Earmarked for Prepayment: 75% reserved to repay existing loans early, reducing future interest costs.
Net Debt/EBITDA Ratio: Measure of leverage; at 2.9×, it's acceptable but rising.

3. Strategic Rationale & Impact

Debt Reduction: Early repayment slashes expensive borrowings, strengthens the balance sheet.
Cost of Capital: NCD yield likely cheaper than some overseas or syndicated loans.
Retail Participation: Minimum investment ₹10,000 invites retail investors, deepening domestic debt markets.
Investor Confidence: Prior issue's oversubscription and rating stability underpin market trust.

4. Risks & Watchpoints

Leverage Trend: Continued debt growth may push net debt/EBITDA past comfortable thresholds.
Interest Rate Environment: Rising rates could erode NCD secondary‑market valuations.
Group Exposure: Adani Group's overall leverage and regulatory scrutiny remain factors.

5. Outlook

AEL's NCD issue is a proactive step to manage its debt profile and broaden its investor base. If coupon servicing remains smooth and leverage stabilizes, this could pave the way for more diversified, lower‑cost funding in the future.