IndianOil raises bonds worth Rs 1,500 crore
New Delhi   10-Sep-2008
IndianOil, which recently hit the corporate bond market after a gap of three years, has raised Rs 1,500 crore from the issue, five times more than its initial plan. India's largest crude oil refiner will use the proceeds for setting up new production assets, estimated at Rs 55,000 crore over the next four years. Its various projects include expansion and upgrade of refineries and Greenfield petrochemical units. "We could have raised more than Rs 1,500 crore, but had taken a rating of up to that amount. The response to the issue has been encouraging," said IndianOil Finance Director SV Narasimhan. "The bonds were primarily bought by mutual funds and provident funds," he added, without disclosing the names of the buyers. IndianOil had hoped to raise a minimum of Rs 300 crore from the bonds issue. It however had an option to raise more if there was demand for the bonds. The company might consider more such bond issues if the need arises. The company, which already has borrowings of around Rs 45,000 crore, is adding debt to run day-to-day operations apart from funding projects. The company is not making any money from retail sale of petrol, diesel, kerosene and cooking gas - which make up around 70 per cent of its total sales - at below production cost contributing Rs 213 crore of loss every day. Its borrowings are expected to go up to Rs 58,000 crore by the end of October, the company's CMD, Sarthak Behuria, said recently.