Enthused by corporate giant Reliance Industries’ $1.5-billion bond sale, a host of Indian companies have lined up plans to raise funds through the sale of bonds in global markets.
While more than half a dozen companies, including the likes of Anil Ambani group firm Reliance Communications, ICICI Bank, Axis Bank and Essar Energy, have already firmed up their bond issuance plans, others are also looking to tap this fund- raising route, banking sources said. RIL’s record $1.5-billion bond sale has come as a boost for India Inc, a senior banking official said, adding that the international debt market has emerged as a major avenue in the backdrop of India emerging as a major source for foreign funds.
Given the recent surge in the inflow of foreign funds into stocks raising concerns about over-heating in the Indian equity market, funds invested through bonds are becoming a relatively safer way, he added.
The bankers said the Indian companies in the final stages of fund-raising through bonds included public-sector firm Rural Electrification Corp (REC), ICICI Bank, Axis Bank, JSW Steel, the Ruias-promoted Essar group’s London-listed arm Essar Energy Plc, IDBI Bank and also telecom major RCom. The analysts said the impressive success of RIL’s first bond issue after 13 years had given a huge boost to India Inc’s plans of raising money in the international markets.
Mukesh Ambani-run RIL late last week sold $1-billion of 10-year notes and $500-million of 30-year bonds.
Reliance Holding will use the net proceeds to refinance existing debt, making other business investments and for general corporate purposes. It is the largest ever public market offshore bond offering by RIL and largest ever corporate bond from India. While RIL, India’s most valuable company and the only corporate from Asia to receive ratings higher than its sovereign from both Moody’s and Standard & Poor’s, was expected to succeed with the offering, the avid interest shown by the international investors has excited many companies waiting in the wings.
