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Informist, Tuesday, Nov. 19, 2024

 

--Sources: UltraTech Cement likely to raise up to INR 10 bln via 10-yr bonds 

--Sources: UltraTech Cement may tap mkt with 10-year bond issue by next week 

 

By Sachi Pandey

 

MUMBAI – UltraTech Cement Ltd. plans to tap the corporate bond market after a gap of more than three years, multiple sources in the know told Informist. The country's largest cement company is likely to raise INR 10 billion through bonds maturing in 10 years.

 

"The arrangers have submitted their bids. They are coming with a 10-year bond and will raise up to 1,000 crore (INR 10 billion). Primary is mostly closed, so they will announce the bidding details this week itself most probably," a dealer at a large private-sector bank told Informist.

 

According to a source involved in the transaction, the issuance will see bidding on Monday or Tuesday with a T+1 allotment structure.

 

According to the sources, multiple arrangers were in a contest to bag UltraTech Cement's deal by quoting coupons as low as possible. "The discussion was going on from last week. All the arrangers were in the fight, but they got some fine levels from two arrangers," a merchant banker told Informist on the condition of anonymity. 

 

Market experts expect the coupon for UltraTech Cement's 10-year bond issuance to range between 7.21% and 7.24%. "This is a 10-year paper, AAA-rated, and they are not a frequent issuer. So we believe the issuance will be well accepted. Obviously, the market conditions also matter for such an issuance, but since it's UltraTech, you never know," a fourth source said.

 

On Nov. 12, the board of UltraTech Cement approved raising up to INR 30 billion through non-convertible, non-cumulative debentures in one or more tranches on a private placement basis. The last time the company tapped the bond market was in January 2021, when it raised INR 10 billion through bonds maturing on Dec. 29, 2023, at a sweet coupon of 4.57%.

 

For the September quarter, UltraTech Cement reported a sharp fall of 36% on year in consolidated net profit to INR 8.2 billion. The company's net profit growth was hit badly as price realisations from cement sales fell 8.4% on year, which more than offset 3% volume growth in the domestic business.

 

At 1423 IST, shares of the cement company were 1.7% higher at INR 10,807 on the National Stock exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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