India Inc raises $7.5 bn in foreign debt so far in 2013
As the cost of rupee funds remains too high, 11 companies have raised a record USD 7.5 billion in foreign debt this year via bonds, which is 75 percent of what India Inc had mopped up in the entire 2012.
Mumbai: As the cost of rupee funds remains too high, 11 companies have raised a record USD 7.5 billion in foreign debt this year via bonds, which is 75 percent of what India Inc had mopped up in the entire 2012.
If the merchant bankers are to be believed, at least USD 2.5 billion-worth bond deals are in the making in the immediate short-term, with Reliance Industries, ONGC Videsh and Union Bank of India working on international bond sale programmes.
Merchant bankers, who did not want to be named, said that this year corporate India is going to mop up at least USD 20 billion in foreign debt, mostly through bond sales.
So far this year 11 corporates in 13 issuances have sold bonds worth USD 7.472 billion to foreign investors, while in the entire 2012 corporate India raised just USD 10 billion in foreign debts.
Reliance, the most cash-rich company in the country sitting over a Rs 84,000-crore cash mount, is planning to raise further USD 2 billion to fund its capex plan.
ONGC arm OVL is planning to raise USD 1 billion via bond sale to fund its overseas acquisition. The state-run Union Bank is also working on a USD 500-million issue.
The companies that raised foreign debt this year are Exim Bank (January and March), ICICI Bank, PowerGrid, Tata Communications, Reliance Industries, HDFC Bank, Bharti Airtel (twice in March), Bank of India, IDBI Bank, Suzlon Energy and State Bank of India.
Bharti Airtel led the pack with a USD 1.5 billion fund- raising in March in two tranches (USD 1 billion and USD 500 million) paying a coupon of 5.13 percent for 10-year.
Second biggest fund raiser was State Bank of India, which last Friday mopped up USD 1 billion through a 5-year US dollar-denominated bond sale that set a new benchmark for itself by pricing it at just 3.25 percent.
Bharti's two issues are interesting as they came in the same month. On March 4 it sold USD 1 billion worth bonds in a 10-year USD money issue priced at 5.15 percent.
On March 25, the company again hit the global debt markets with a tap issue or follow-on issue and raised another USD 500 million in a 10-year issue at a slightly better pricing of 5.13 percent coupon rate of USD money.
Both the issues were carried out by Bharti's global arm Bharti Airtel International Netherlands.
The third biggest amount was raised by RIL, when it sold perpetual bonds worth USD 800 million in the last week of January at a coupon of 5.88 percent, making history by becoming the first company not only from the country but also from entire Asia, ex-Japan to do so.