The third public issue of secured non-convertible debentures (NCDs) by Adani Enterprises opening on January 6 (Tuesday), has a base issue size of ₹500 crore, with a green-shoe option of up to ₹500 crore, taking the total to ₹1,000 crore. The issue closes January 19 (Monday), with an option for early closure.
The NCDs have a face value of ₹1,000 each. Each application will be for a minimum of 10 NCDs and in multiples of 1 NCD thereafter. The minimum application size would be ₹10,000. The proposed NCDs have been rated “Care AA-; Stable” by CARE Ratings.
AEL’s second NCD issuance of ₹1,000 crore, launched in July last year, was fully subscribed in 3 hours on the first day.
At least 75% of the money raised from this issue will be used to pay back the company’s existing borrowings (fully or partly) and/or pay interest on those borrowings. The remaining amount (up to 25%) can be used for general corporate purposes.
On the face of it, AEL is offering competitive yields compared to similarly rated instruments. So, should you invest? Read on.
Yield, coupons
The AEL NCDs are available in tenors of 24 months, 36 months and 60 months with quarterly, annual and cumulative interest payment options across eight series (see table below – scroll sideways to see all the options).
On a comparable-tenor basis, Adani Enterprises’ current NCD issue offers an effective yield of about 8.74–8.75 per cent for the 36-month option and 8.89–8.90 per cent for the 60-month option. These translate into an extra yield of roughly 64–65 basis points over prevailing AA-rated NBFC yields at 3 years and about 49–50 basis points at 5 years. We refer to the NBFC curve only as a practical yardstick because retail NCD buyers typically compare “higher-yield, non-sovereign” options across issuers in the same bucket, even when the issuer itself is not an NBFC.
AEL is a non-NBFC corporate, but rated AA-, and it’s paying a premium that sits between “plain AA corporate” and “NBFC-ish” pricing.
You may also note that this year’s offer is priced about 35–40 basis points lower across tenors compared with last year’s public NCD issue, which is broadly consistent with the issuer’s own positioning around a softer interest-rate cycle.
Investors are giving up yield for the same issuer/rating in exchange for lower-rate environment plus time passage.
AEL is not a simple annuity-style utility. Hence, the yield pickup/extra yield is partly paying for complexity and execution/rollover risk, not only for “one-notch below AA”.
AEL strengths & weaknesses
AEL functions as a business incubator of the Adani Group. It has diversified operations spanning integrated natural resources, transport & logistics, and developing energy and infrastructure businesses. While it was established originally as a commodity trader, the firm has built and spun off large ventures (ports, power, renewables, city gas, etc.). It is currently nurturing new segments including Adani New Industries (ANIL).
The company’s strengths lie in its demonstrated ability to incubate and scale businesses, with past successes across ports, power generation and transmission, renewables and city gas, and ongoing incubation in airports, roads, data centres and new energy. It holds a leading position in coal trading and mining services, benefiting from scale, integrated global supply chains and a sizeable MDO (mine developer operator) portfolio that supports meaningful volume visibility. The airports platform enjoys strong passenger and non-aero revenue trends under a regulated cost-recovery framework. In ANIL, backward-integrated solar manufacturing and group-linked wind offtake provide resilience. Strong fund-raising and recent stake-sale proceeds add financial flexibility.
On the flipside, Adani Enterprises’ credit profile remains closely tied to execution and funding discipline across multiple large projects. The group is in the middle of sizeable debt-funded capex, which raises the risk of cost overruns, timeline slippages and higher-than-planned leverage. In airports, aeronautical capex is typically supported by regulated returns, but timely completion within budget and without material regulatory disallowance remains important. The bigger uncertainty sits in discretionary non-aero and city-side development, where cash flows depend on market demand and ramp-up execution. Roads add another layer of volume risk, especially for newer projects that need a steady scale-up in toll collections while also meeting strict O&M (operations & maintenance) requirements to avoid penalties. The green hydrogen push brings execution, technology and offtake risks in an ecosystem that is still evolving, even if parts of the future capex are market-linked and discretionary. Finally, ongoing US investigations involving the promoter remain a headline risk. If adverse findings emerge in the US, that could tighten financial flexibility.
As you would have read in our AEL rights issue coverage, the balance sheet remains levered and cash flows can remain under pressure in the current capex cycle. As of September 30, 2025, AEL’s consolidated debt–equity was around 1.5x (expected to fall to below 1x after the entire proceeds of rights issue come in by March-2026), with total debt of about ₹92,000 crore and cash and equivalents of about ₹12,500 crore. A meaningful portion of the borrowing is either high-cost or short-maturity commercial paper, which keeps refinancing discipline important.
While reported profitability has improved, it has also been supported at times by stake-sale related gains. Free cash flow can remain under pressure as airports, new energy, data centres, copper, PVC and roads stay in investment mode. Separately, the group’s structural complexity also forms part of the risk backdrop, with subsidiaries involved in numerous legal and regulatory proceedings, where the “aggregate amount involved” is over ₹44,000 crore.
Our takeaway
If an investor is comparing Adani NCD to plain AA corporate curve, this looks like a healthy extra yield. If an investor is comparing to AA/AA- NBFC paper, the additional yield is moderate.
The case is strongest when the investor can hold to maturity, wants predictable coupons, and explicitly accepts issuer complexity as the “price” of the extra spread.
Quarterly (Series III/VI) suit investors who want regular cash flows and are comfortable reinvesting the coupons. Annual (Series I/IV/VII) are for those who want simpler cash flow, typically slightly different coupon/yield trade-off. Cumulative (Series II/V/VIII) are for investors who can lock money and prefer maturity value, but they are comfortable with liquidity/price risk if they need to exit early.
This is not an FD substitute. The extra yield should be viewed as compensation for execution and refinancing risk in a capex-heavy phase, plus group and regulatory headline risk.
Invest only if you can hold to maturity and tolerate mark-to-market swings, because a forced exit can crystallise losses.
Also, keep in mind that such high-yield public NCD issues can get fully subscribed quickly, sometimes even on day one, so applications may need to be placed early if you intend to participate.
Published on January 5, 2026
