Rs 1,500 crore of Adani Enterprises short-term debt to mature by April 27

Commercial papers worth Rs 1,497 crore issued by Adani Enterprises are set to mature between February 6 and April 27, data provided by sources showed. This comes amid a steep plunge in stock and international bond prices of Adani Group companies.

The fall was triggered by short seller Hindenburg Research’s accusation against the group of accounting fraud and stock manipulation. Adani Group has denied these allegations.

Commercial papers are debt instruments meant to cover short-term obligations. Most of the CPs issued by Adani Enterprises had three-month maturity, while some had a six-month maturity, the data showed.

According to the data, CPs worth Rs 215 crore are set to mature in February. Of these, Rs 30 crore worth of papers had already been redeemed. CPs worth Rs 1,257 crore are set to mature in March, and papers worth Rs 55 crore will mature in April. From May to October, CPs worth Rs 112 crore are set to mature, the data showed.

The coupon rates, which show the return paid by the issuer to the investor, for the CPs maturing from February 6 to April 27 were in a band of 7.90-8.25 per cent, the data showed. In January 2024, CP redemptions worth Rs 50 crore are lined up for Adani Enterprises, the data showed.

At present, rates on three-month CPs for NBFCs are around 7.50-7.60 per cent, treasury officials said. There were no fresh quotes for papers from Adani Enterprises at the current juncture, they said.

Adani Enterprises on Wednesday called off its Rs 20,000-crore follow-on public offer. Market participants said, however, that the upcoming repayments of CPs were likely to go through smoothly.

“There have been no quotes in the CP market for Adani after the Hindenburg episode. However, for these upcoming CPs, there seems to be little doubt about repayment because a large part of these would be for Adani Ports, where the cash flow is strong,” a source said.

“It is unlikely that we would see a situation similar to the DHFL (Dewan Housing Finance) crisis where the papers were sold in the market. For the Adani CPs, it is better that they mature. The market is very thin for these; it will be very difficult to find a buyer. Moreover, if someone were to buy it would be for 11-12 per cent,” the source said.

Hindenburg Research has said that it has a short position in the Adani Group’s debt. A short position refers to a bet taken on the price of an asset declining.

The break-up

CPs worth Rs 215 cr are set to mature in February, Of these, Rs 30 cr worth of papers have already been redeemed
 

CPs worth Rs 1,257 cr are set to mature in March, and papers worth Rs 55 cr will mature in April
 

From May to October, CPs worth Rs 112 cr are set to mature
 

The coupon rates for the CPs maturing from Feb 6 to April 27 were in a band of 7.90%-8.25%
 

CPs are debt instruments meant to cover short-term obligations