IndianOil enters bond market for Rs 300 cr
Mumbai   28-Aug-2008
After a gap of six years, IndianOil is tapping the bond market to raise term money at a fixed rate of 11 % for ten years and 11.15% for three years. Sources said IndianOil had last raised money from the bond market in 2002. The issue size is Rs 300 crore, but the company can accept higher subscription under the greenshoe option. Rating agency ICRA has issued AA+ rating for the programme, while Fitch has assigned AAA for the long-term debt of the company for a sum of Rs 1,500 crore. This indicates that IndianOil can raise at least upto Rs 1,500 crore through the current issue. The issue will be open for subscription on August 28 and close on September 5. IndianOil is India's largest refining and marketing company, controlling 10 out of 19 operational refineries in the country. Its refineries have a capacity of 60.2 mtpa against a total of 148.9 mtpa in India. Sources said that insurance companies and provident funds are most likely to invest in the bonds. ICICI Securities Primary Dealership, Axis Bank, StanChart, Citibank and A K Capital are arrangers to the issue. Recently, Power Finance Corporation concluded a bond issue of three years where the company raised Rs 300 crore or 10.85%. IndianOil loses Rs 240 crore everyday due to the subsidised sale of petro products. However, this loss is recompensed by the government through oil bonds.