After a gap of nearly two-and-half years, Indian Oil Corporation Ltd has raised over Rs 1,400 crore from the Indian bond markets.
Indian Oil, which has been taking a hit on its profitability because of certain Government policies such as selling petroleum products at subsidised rates, will use the proceeds of the bond issue for meeting capital expenditure of ongoing domestic projects.
The company’s borrowings currently stand at Rs 79,000 crore.
According to the company, the issue, which was launched with an original size of Rs 500 crore, was subscribed over three times with subscription aggregating approximately Rs 1,600 crore. IOC has decided a cut-off coupon rate of 9.28 per cent — the lower end of the book-building range.
The secured redeemable non-convertible bonds opened for subscription on private placement basis on December 15. The ‘AAA’ rated bonds have a maturity of five years with put and call options at the end of the 18th month.
In July, Indian Oil had raised $500 million through international bonds. The deal was finalised through the book building route. The issue was subscribed about four times and the company received offers of about $2 billion. These bonds were for a tenor of 10 years and to be utilised for meeting part of the company’s capital expenditure requirements.