How Ambani and Adani are attracting India’s retail investors into financial markets?

(Bloomberg) -- Billionaires Mukesh Ambani and Gautam Adani are wooing India’s retail investors as this cadre entrenches itself into the country’s financial markets.

Adani Enterprises Ltd., the flagship of Asia’s no. 2 richest tycoon, is for the first time marketing bonds to mom and pop investors, and on Wednesday said the quota set aside for this segment was fully subscribed on the first day of the sale.

The following day, Ambani-led Reliance Industries Ltd.’s board approved giving shareholders an extra share for every one they hold — a move that boosts liquidity and affordability for small investors as it increases the number of shares in the portfolio while slashing the stock price.

Adani’s debt sale taps into a new source of funding at a time when the group is moving past a scathing short-seller attack last year and riding a surge in investor confidence.

Reliance’s bonus issue may be a sweetener for shareholders of the energy-to-entertainment conglomerate who were awaiting clarity on the initial public offerings of its telecom and retail units but got no steer from Ambani, Asia’s richest person, in his annual speech last week.

Millions of Indians have flocked to the stock market in recent years, lured by a recent bull run and pivoting away from traditional bank deposits.

“When Reliance grows, we reward our shareholders generously,” Ambani said in the speech to Reliance shareholders on Aug. 29, minutes after the company announced plans for its first bonus issue since 2017. “When our shareholders are rewarded handsomely, Reliance grows faster and creates more value.”

Adani Enterprises, meanwhile, continued to get a strong response on the second day of its maiden bond issuance targeted at individuals. It got subscriptions worth 8.9 billion rupees for the bond that sought to raise 8 billion rupees, according to lead manager Nuvama Wealth Management’s website.

Adani Enterprises is offering bonds due in two-, three- and five years, with yield ranging between 9.25% and 9.90%. At least three quarters of the proceeds will be used to prepay or repay the company’s debt, while the rest is for general corporate purposes.

Bond issues like these will allow more individuals to participate in the public debt securities and reap higher returns, Adani Group’s Chief Financial Officer Jugeshinder Singh said in an Aug. 29 briefing.

--With assistance from Saikat Das.

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