IFR Asia - August 18, 2018

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COUNTRY REPORT INDIA

INDIA


DEBT CAPITAL MARKETS


› TATA CAPITAL FILES FOR RETAIL BONDS


TATA CAPITAL FINANCIAL SERVICES has filed a draft
shelf prospectus with the market regulator
to raise up to Rs75bn (US$1.07bn) from
a public issue of bonds in one or more
tranches, according to a BSE filing.
The unsecured non-convertible
debentures will be issued as subordinated
debt and will be eligible for inclusion in
Tier 2 capital.
Crisil has assigned a AAA/stable rating to
the notes.
AK Capital Services, Axis Bank and Edelweiss
Financial Services
are the lead arrangers.
Indian non-banking financial companies
are eyeing retail bonds to broaden their
funding options at a time when bank
finance and private debt placements are
becoming increasingly constrained.
Tata Housing is also planning to raise
funds from a retail bond issue, according to
a market source.


› BIRLA ISSUES BONDS


India’s ADITYA BIRLA FINANCE has raised a
total of Rs4.35bn from a three-part bond
offering, according to a filing on National
Securities Depository Limited.
The non-banking financial company
printed Rs500m from bonds maturing
on September 26, 2019 at 8.518%. It also
raised Rs2.85bn from notes maturing on
December 26, 2019 at 8.5855% and Rs1bn
from two-year bonds at 8.75%.
The private placement was completed on
August 14.
India Ratings has assigned a AAA rating
to the notes.


› CGP EYES RS27BN FROM BONDS


COASTAL GUJARAT POWER is planning to raise
Rs27bn from a two-tranche domestic bond
issue, according to market sources.
It is eyeing Rs17bn from a five-year
tranche at 9.7% and Rs10bn from a 10-year
portion at 9.90%.
The rupee-denominated notes will have
an unconditional guarantee by parent
company Tata Power and the funds will
be used to refinance external commercial
borrowing loans, said market sources.
Tata Power estimates it will borrow
around Rs55bn in FY19 mostly through
bonds for refinancing, including loans
taken out for the acquisition of Walwhan


Renewable Energy Limited. It intends to
raise up to Rs20bn from bonds to part
refinance Coastal Gujarat Power’s foreign
currency loan, the company said in an
annual report filing.
CGP reported a loss of Rs17.21bn in FY18
because of an increase in fuel prices and
the adverse impact of higher coal prices
following a change in the law in Indonesia.
“The company is making efforts to
improve profitability through initiatives
like sourcing of low-cost coal from other
geographies and financial restructuring
to reduce interest costs,” according to the
annual report.
L&T Financial Consultant and Tata Capital
are the lead arrangers of the issue. The
rupee notes are likely to be rated AA (SO)
by Care Ratings.
CGP is yet to make an announcement
on the amount and the tenor of the bond
issue.

› GHMC SEALS 10-YEAR PRINT

GREATER HYDERABAD MUNICIPAL CORPORATION has
raised Rs1.95bn from 10-year bonds at
9.38%, payable semi-annually, according to
market sources.
The financing for GHMC, based in the
capital of southern India’s Telangana state,
is the fourth municipal bond issue since
Pune revived the market in June last year
with a 10-year bond at 7.59%.
The notes are rated AA by Care and India
Ratings. The interest on the bonds will be
paid semi-annually.
SBI Capital Markets is the arranger of the
bond issue.
GHMC paid nearly 40bp more to raise
rupee bonds this time around. In February,
it printed Rs2bn from 10-year bonds at
8.9%, payable semi-annually.
The proceeds from the issue will be
used to construct skyways and conflict
free corridors under the Strategic Road
Development Plan.
Pension funds, banks and non-banking
financial companies invested in the issue.
The unsecured notes are backed by
a structured payment mechanism. The
property tax, fees and user charges
collected by GHMC will be deposited every
month in a separate no-lien escrow account
for servicing of bonds, according to a press
release.
“GHMC continues to draw strength from
the healthy financial profile of the entity
backed by consistent revenue surplus over
the years,” Care said in a ratings report.
It has 93% of its revenue coming from
its own sources and high cash reserves,
the rating agency said. However, Care said
that the rating is constrained by “limited
autonomy in terms of levying taxes with no

revision in tax rates in recent years, large
sized debt-funded non-revenue generating
projects undertaken and risks associated
with high capital outlay.”
GHMC has yet to confirm the size and
tenor of the bond offering.

› GMR INFRA GETS BOARD NOD

GMR INFRASTRUCTURE has received board
approval to raise up to Rs25bn from debt
and/or equity securities, according to an
exchange filing.
GMR Infra may offer equity shares,
equity-linked instruments, bonds or any
other securities in one or more tranches.
It has also received a separate board
approval to sell Rs4.5bn of optionally
convertible debentures.
The infrastructure company reported a
net loss of Rs2.35bn for the June quarter,
up from Rs1.25bn a year ago.

› INDIAN STATE ISSUES SMART CITY BONDS

The ANDHRA PRADESH CAPITAL REGION DEVELOPMENT
AUTHORITY has raised Rs20bn from 10-year
bonds for infrastructure development in
Amravati, the capital of the southern Indian
state, according to a press release.
The bonds have a five-year moratorium
on principal repayment. The notes
are issued in a separately transferable
redeemable principal part format of
between six and 10 years.
APCRDA was targeting Rs13bn, plus
a greenshoe of Rs7bn. The issue was
oversubscribed by 1.53 times within an
hour on the electronic bidding platform on
August 14.
The notes are rated AA– (structured
obligation) by Brickwork, Auicte (formerly
Smera Ratings) and A+ (SO) by Crisil.
The rating reflects an unconditional and
irrevocable guarantee by the government
of Andhra Pradesh, a trustee-administered
escrow and payment mechanism for the
bonds and adequate liquidity in the form
of a debt service reserve account, said Crisil
in a note.
The cash flows from APCRDA through
land monetization will be used for debt
servicing, “although timely and adequate
monetization could be a constraint,” said
Crisil.
A few large mutual funds have invested
in the bonds. Franklin Templeton Asset
Management and Birla Sun Life Mutual
fund are heard to have picked up large
amounts in the issue.
AK Capital Services is the sole arranger for
the deal.
India’s federal government is pushing to
fund its ambitious “Smart Cities” project,
which aims to modernise 100 cities by 2020
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