COUNTRY REPORT INDIAINDIA
DEBT CAPITAL MARKETS
› REC TO SEEK BOARD NOD FOR BONDS
REC, formerly known as Rural Electrification
Corporation, will seek board approval on
July 10 to raise up to Rs750bn (US$11bn)
from bonds, according to a filing on BSE.
The issuer will raise the funds through
secured and unsecured non-convertible
debentures via a private placement in one
or more tranches, subject to shareholder
approval.
The funds will be raised over the course
of one year from the date of shareholder
approval.
› THDC WITHDRAWS 10-YEAR BOND ISSUE
TEHRI HYDRO DEVELOPMENT CORP scrapped the sale
of Rs15bn 10-year bonds after receiving tepid
investor interest and failing to achieve its
price target, according to market sources.
The hydropower company is jointly
owned by the government of India and the
state government of Uttar Pradesh.
The issuer was eyeing Rs7.5bn, plus a
greenshoe option of the same amount.
India Ratings and Icra had assigned
provisional ratings of AA+ and AA,
respectively.
› SHRIRAM EYES RS100BN RETAIL BONDS
SHRIRAM TRANSPORT FINANCE is planning to raise
up to Rs100bn from a public issue of bonds
in one or more tranches, according to a
draft prospectus filed on the BSE.
JM Financial, AK Capital and SMCCapitals are
the arrangers.
Care and Crisil have assigned AA+ ratings
to the bonds.
› SBI GETS BOARD NOD FOR AT1 SALE
STATE BANK OF INDIA has received board
approval to raise up to Rs70bn from Basel
III-compliant Additional Tier 1 bonds,
according to a filing on the exchanges.
The state-owned bank will issue the AT1
bonds in rupee or any other convertible
currency such as offshore rupee (Masala) or
US dollar through a public offering or private
placement to overseas and Indian investors.
It will raise the funds in one or more
tranches at an appropriate time.
The coupon will be decided at the time
of the issuance in the current financial year
and SBI will obtain government of India
approval for the issuance.
The first tranche for AT1 bonds in the
onshore market is expected in August, said
a source close to the plans.
Recently, SBI raised Rs50bn from 10-
year non-call five Basel III-compliant Tier 2
bonds at 7.99%› RHF EXTENDS MATURITYRELIANCE HOME FINANCE has extended the
maturity of Rs4bn non-convertible
debentures to October 31 because of tight
liquidity, according to a filing on BSE.
The extension, “to address timing
mismatches in receipt of proceeds from
the ongoing monetisation of retail asset
pools of the company”, was agreed by the
debenture trustee and bondholders, said
the non-banking financial company under
the control of business tycoon Anil Ambani.
“The extension of maturities by mutual
consent is a recognised global practice to
deal with severe dislocations in capital
markets, and does not in any sense
constitute a default.”
Ambani, once one of India’s top
billionaires, has seen his wealth
erode in the past five years because of
burgeoning debt at firms in his group.
His diversified telecoms to financial
services and infrastructure group has been
struggling to make debt repayments on
time, and his flagship business, Reliance
Communications, is going through
insolvency proceedings.
Reliance Home Finance is selling assets
including its Mumbai headquarters to
pare debt, according to local news reports.
The housing finance company has already
monetised Rs50bn of retail assets.
It is facing liquidity stress because all
categories of lenders have completely
frozen new lending to housing finance
companies for nine months, the company
said.
Market participants said domestic
banks are reluctant to lend money to any
company controlled by Ambani.
Reliance Mutual Fund said a few funds
had exposure to the bonds of Reliance
Home Finance which were due to
mature. “While Reliance Home Finance
has paid interest that was due, it has
failed to honour its principal repayment
obligations,” the fund house said in a
statement to investors.
The mutual fund has marked down
the investment, which has affected the
net asset value of the various open-ended
schemes.› KOSAMATTAM FILES FOR PUBLIC BONDSKOSAMATTAM FINANCE has filed a draft shelf
prospectus with the market regulator toraise up to Rs3bn from a public issue of
bonds.
The Indian gold loan-financing company
plans to raise Rs1.5bn, with a greenshoe
option of the same amount.
It is planning to offer bonds with
maturities of 400 days, two, three, four, five
and seven years.
India Ratings has assigned a BBB rating to
the notes.› INDIABULLS TO BUY BACK MORE BONDSINDIABULLS HOUSING FINANCE will buy back
a total of Rs27.05bn outstanding non-
convertible debentures and Masala bonds
maturing in September and October,
according to market sources.
The housing finance company is buying
back Rs13.75bn of NCDs due in September,
of which Rs6.6bn were issued via the public
route. It is also buying back Rs13.3bn
Masala bonds maturing in October.
Approval is being sought from the Reserve
Bank of India, the company said.
In June, the non-banking financial
company bought back Rs21.73bn of bonds
maturing in July and August to build
investor confidence.
The company said it had cash and cash
equivalents of Rs282bn as of May 31,
according to a filing on the exchanges on
June 6.
Indiabulls Housing Finance was rattled
last month when a writ was filed in India’s
Supreme Court accusing its chairman and
directors of embezzlement, in what the
company said was an attempt at blackmail,
before the petitioner withdrew the claim a
few days later.› HDFC SEEKS BOARD APPROVALHOUSING DEVELOPMENT FINANCE CORP will seek
board approval on August 2 to raise up to
Rs450bn from non-convertible debentures,
according to a filing on the exchanges.
The funds will be raised via private
placement in various tranches under the
shelf disclosure document.SYNDICATED LOANS
› PFC SEALS US$300M LOANState-owned POWER FINANCE CORP has
completed a US$300m three-year loan,
according to a company filing last Monday.
State Bank of India Hong Kong branch and
MUFG were the lenders on the deal, PFC’s
second foreign-currency borrowing in the
second quarter of this year.
Last month, PFC raised US$1bn in Reg S
bonds – the biggest overseas issuance from