Enthused by corporate giant Reliance Industries' $1.5-billion dollar bond sale, a host of companies have lined up plans to raise funds through 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 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 inflow of foreign funds into stocks raising concerns about over-heating in the Indian equity market, funds invested through bonds is becoming a relatively safer way, he added.
The bankers said that the Indian companies in final stages of fund-raising through bonds include public sector firm Rural Electrification Corp (REC), ICICI Bank, Axis Bank, JSW Steel, Ruias-promoted Essar group's London-listed arm Essar Energy Plc, IDBI Bank as also telecom major RCOM.
The analysts said that the impressive success of RIL's first bond issue after 13 years has given a huge boost to India Inc's plans of raising money in the international markets.
Billionaire Mukesh Ambani-run RIL late last week sold $1 billion of 10-year notes and $500 million of 30-year bonds. Reliance Holding USA Inc, a wholly owned subsidiary of RIL, priced the 10-year notes athigher than even the similar maturity US Treasury notes.
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.
Rural Electrification Corporation (REC), which was recently granted Infrastructure Finance Company status by the RBI, could be the next Indian company to raise funds through bonds. The company is planning to raise $500 million via bond issue in Europe, Singapore and Hong Kong in the coming months.
Besides, ICICI Bank is also expected to sell as much as $1 billion debt papers, while at least two other banks, Axis Bank and IDBI Bank are also believed to be preparing for bond sales.