IOC targets FIIs to raise Rs 2k cr through 5-year bond issue
New Delhi   12-Dec-2011

IndianOil (IOC) will raise around Rs 2,000 crore through a 5-year bond issue, targeting foreign institutional investors, people familiar with the matter said.

The state-owned oil and gas company has roped in nine merchant bankers for the bond issue, sources said. The company has invited bids for underwriting the issue from merchant bankers on Wednesday. AK Capital, Daiwa Capital, Axis Bank, Almondz Securities, I-Sec PD and Trust Capital are some of the lead managers to the issue.

IOC is coming to the bond market almost after a year and a half. “It’s a fiveyear bond with a call and put option after eighteen months. The firm is keen on getting foreign institutional investors to participate in it,” said one of the lead managers. “It will get a good rate since it is not a frequent issuer,” he said.

In the quarter ended September, IOC reported EBIDTA losses of Rs 5,300 crore and net loss of Rs 7,480 crore. Revenue during the quarter was up 15.3% to Rs 8,918 crore. Its interest cost surged 192% year-onyear to Rs 1,480 crore. The bonds have ‘AAA’ rating, sources said. Currently, ‘AAA’-rated corporate bonds for a tenure of five years trade at 9.40%, which is almost 100 basis points higher than the yield on a five-year government bond. One basis point is onehundredth of a percentage point.