COUNTRY REPORT INDIAINDIA
DEBT CAPITAL MARKETS
› TAKEOVER TO TRIGGER REC CLAUSE
State-owned POWER FINANCE CORP is set to buy
the Indian government’s majority stake in
REC, in a transaction that would help raise
state divestment revenues but could result
in an early redemption of bonds sold two
months ago.
Finance Minister Arun Jaitley last
Thursday told reporters that the sale plan
had been approved, according to Reuters,
but the transaction needs further approvals,
from parties including the Competition
Commission of India and financial
regulators.
The government owns a 65.61% stake
in PFC, the financing unit for India’s state
and central government-owned power
generation companies, and as of June this
year held 57.95% in REC, which finances
and promotes rural electrification projects.
In October, REC sold US$700m five-
year bonds in a 144A/Reg S offering,
with a change of control clause stating
that investors could put the bonds if the
government’s stake dropped below 51%.
Last month, Power Finance Corp made its
debut in the 144A market with a US$500m
10-year trade, despite rumours at the time
that REC could acquire PFC.
The Indian government has a divestment
target of Rs800bn (US$11.3bn) for the year
ending March 31 2019.
SYNDICATED LOANS
› BPCL BACK FOR MORE AFTER BILATERAL
BHARAT PETROLEUM CORP is back for a dual-
tranche loan of up to US$450m, barely
weeks after it opted for a US$300m bilateral
facility for an earlier request for proposals.
State-owned BPCL is eyeing three and
five-year maturities with a base size of
US$200m and a greenshoe of US$250m.
The deadline for responses is December
11.
The latest RFP follows an earlier one
BPCL had issued in October for a US$300m
five-year loan with a US$300m greenshoe
option.
After receiving an extremely aggressive
bid of 118bp all-in pricing from state-owned
Bank of Baroda, BPCL opted for a bilateral
facility with the Indian lender at that
pricing.
However, as it still eyed a US$300m
greenshoe from that request, BPCL sent out
a new RFP with the increased amount.
The same is likely to be the case with
BPCL’s peer, HINDUSTAN PETROLEUM CORP, which
had sent an RFP for a five-year loan of up to
US$500m in October.
HPCL is said to have opted for a bilateral
from another Indian state-owned lender,
Canara Bank, after getting an aggressive bid
for the mandate from the latter.
However, HPCL is only taking US$300m
from Canara Bank, which means, like BPCL,
it too could send a new RFP.
Meanwhile, mandates are also awaited
from BPCL’s affiliate, BHARAT OMAN REFINERIES,
and INDIAN OIL CORP.
BORL, a 50-50 joint venture between
BPCL and Oman Oil, is seeking a US$125m
three-year refinancing.
IOC is eyeing a US$300m fundraising, but
from five-year money after initially having
sent out an RFP for a three-year financing.RESTRUCTURING
› COURT CLEARS RCOM ROADBLOCKRELIANCE COMMUNICATIONS’ debt restructuring
process is back on track, after a court
decision cleared it to proceed with the sale
of telecom spectrum.
India’s Supreme Court on November
30 ordered the Department of
Telecommunications to permit RCom to
trade its spectrum, which it plans to sell
to rival Reliance Jio Infocomm as part of a
package of asset sales.
The government had asked RCom or
Reliance Jio to put up Rs29.4bn (US$421m)
in bank guarantees towards spectrum
usage charges owed by RCom. RCom
had provided land as collateral, but said
it was not in a position to provide bank
guarantees.
The supreme court ruled that no bankguarantee was required, and instead
RCom’s wholly owned subsidiary Reliance
Realty will provide a corporate guarantee
of Rs14bn.
The spectrum sale will allow RCom to
repay trade creditor Ericsson and minority
investors of subsidiary Reliance Infratel.
The asset sales are part of a series of
transactions to raise cash and cut debt at
RCom. The telco also agreed to exchange
its US$300m 6.5% senior secured bonds for
new notes and cash, with the cash payouts
dependent on milestones including the
completion of asset sales.EQUITY CAPITAL MARKETS
› IPO OF FLAIR WINS APPROVALPen maker FLAIR WRITING INDUSTRIES has
received Securities and Exchange Board
of India approval for an IPO of Rs4.5bn
(US$64m).
The timing of the offer has not been
decided but is likely sometime next year.
Primary shares totalling Rs3.3bn and
secondary shares of Rs1.2bn will be sold.Top lead managers of Indian rupee bonds
1/1/18 – 30/11/18
Amount
Name Issues Rs(m) %
1 Axis 129 651,431.0 26.8
2 HDFC 83 311,288.4 12.8
3 Trust Group 117 263,238.5 10.8
4 ICICI Bank 105 241,173.7 9.9
5 AK Capital 54 168,928.0 7.0
6 Yes Bank 43 140,212.7 5.8
7 Edelweiss Financial 26 132,222.0 5.5
8 Kotak Mahindra 35 91,484.5 3.8
9 HSBC 8 69,100.0 2.9
10 State Bank of India 21 52,421.9 2.2
Total 305 2,427,782.5
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: AS23Top bookrunners of India syndicated loans
1/1/18 – 30/11/18
Amount
Name Deals US$(m) %
1 Yes Bank 23 2,980.4 12.9
2 Standard Chartered 21 2,208.3 9.6
3 Axis 16 1,870.2 8.1
4 L&T Financial Services 27 1,685.2 7.3
5 State Bank of India 13 1,485.8 6.4
6 ICICI Bank 13 1,474.0 6.4
7 Indusind-Bank 26 1,050.9 4.6
8 DBS 7 927.4 4.0
9 Citigroup 8 786.1 3.4
10 MUFG 8 766.0 3.3
Total 130 23,115.6
* Based on market of syndication and market total
Proportional credit
Source: Refinitiv data SDC Code: S10bIndia equity and equity-related
1/1/18 – 30/11/18
Amount
Name Issues US$(m) %
1 Citigroup 15 1,902.2 12.1
2 Axis 15 1,675.5 10.6
3 Kotak Mahindra 12 1,297.4 8.2
4 State Bank of India 12 1,209.0 7.7
5 Morgan Stanley 6 1,189.3 7.5
6 ICICI Bank 11 894.1 5.7
7 JM Financial 14 818.1 5.2
8 BAML 4 638.6 4.1
9 JP Morgan 5 530.8 3.4
10 Goldman Sachs 5 514.0 3.3
Total 231 15,769.1Source: Refinitiv data SDC Code: C1L