{"id":79034,"date":"2018-05-21T07:07:05","date_gmt":"2018-05-21T07:07:05","guid":{"rendered":"http:\/\/www.bnreport.com\/hindalco-plans-to-raise-rs-5000-crore-to-repay-bank-loans\/"},"modified":"2018-05-21T07:07:05","modified_gmt":"2018-05-21T07:07:05","slug":"hindalco-plans-to-raise-rs-5000-crore-to-repay-bank-loans","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/hindalco-plans-to-raise-rs-5000-crore-to-repay-bank-loans\/","title":{"rendered":"Hindalco plans to raise Rs 5,000 crore to repay bank loans"},"content":{"rendered":"

MUMBAI: Leading aluminium producer Hindalco Industries<\/a> is set to raise about Rs 5,000 crore by selling corporate bonds to repay bank loans, a move that is expected to reduce its credit costs. <\/p>\n

\u201cWe want to pay back at least Rs 5,000 crore this year and probably refinance it with a bond in the Indian market,\u201d Satish Pai, MD at Hindalco, told ET. <\/p>\n

The companys current net debt stands at Rs 15,000 crore. <\/p>\n

However, Pai said that even though it is considering such a move, the company is waiting for the right window. \u201cRight now is not the right time, with the rupee weakening and inflation going up,\u201d said Pai. <\/p>\n

Hindalco may be in talks with domestic investment bankers to assess the market condition while it may have also approached large institutional investors (large insurers, the provident fund manager, or mutual funds) to place those debt securities directly, said market sources. <\/p>\n

About a year ago, it tapped the corporate bond market. <\/p>\n

Going by current market rates, Hindalco<\/a> bonds with 10-year maturity are expected to be priced in the range 8.75-9 per cent. The company will go ahead with the bond sale only if it receives a premium<\/a> price. <\/p>\n

\u201cNotwithstanding the rise in yields over the last two-three months, higher or top rated entities can still save around 25-50 basis points if today they were to replace\/ refinance funds raised three-five years back,\u201d said Karthik Srinivasan, senior vice president at ICRA. The savings to these companies would have been higher at 100-150 bps if they had replaced the funds a couple of quarters earlier. <\/p>\n

Hindalco is rated AA by Crisil Ratings. <\/p>\n

The benchmark bond yield in India raced to a three-year high on May 16 amid rising US Treasury yields. <\/p>\n

\u201cBond market volatility<\/a> could pose a challenge hurting investment appetite,\u201d said Ajay Manglunia, executive VP (fixed income) at Edelweiss Finance. \u201cThe company may time the market appropriately to allow the appetite to improve.\u201d <\/p>\n

\u201cThis should help it obtain a premium in pricing over its peers,\u201d he said. <\/p>\n

Hindalco is not a frequent issuer. For quite some time, the company did not tap the bond market. Many mutual funds such as Kotak, IDFC, and ICICI Prudential have invested in their bonds in the past. <\/p>\n

\u201cHindalco papers are quite acceptable among investors especially when the commodity cycle is turning,\u201d said Lakshmi<\/a> Iyer, CIO (debt) & head \u2013 products, Kotak AMC. \u201cIf it does sell now, it may have to offer a few basis points extra as the yield curve is elevated. But there will be buyers for the papers.\u201d <\/p>\n

Even though the weakening rupee has triggered concerns of a rise in interest rates that may impact the debt serving ability of corporates, Hindalco is unfazed. <\/p>\n

\u201cWe have got SBI MCLR lock ins. If the interest rates go up, the impact will be much less as the loans are much smaller now,\u201d Pai said. <\/p>\n

Hindalco Industries reported a 25 per cent fall in its fourth-quarter profit, missing Street estimates. Net profit dropped to Rs 377 crore in the three months through March 31, from Rs 503 crore a year earlier. <\/p>\n

<\/a><\/strong> <\/a><\/p>\n

Original Article<\/a><\/p>\n

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ET Markets<\/a><\/h5>\n

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MUMBAI: Leading aluminium producer Hindalco Industries is se..<\/p>\n","protected":false},"author":1,"featured_media":79035,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-79034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nHindalco plans to raise Rs 5,000 crore to repay bank loans - Business News Report<\/title>\n<meta name=\"description\" content=\"MUMBAI: Leading aluminium producer Hindalco Industries is se..\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bnreport.com\/en\/hindalco-plans-to-raise-rs-5000-crore-to-repay-bank-loans\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindalco plans to raise Rs 5,000 crore to repay bank loans - 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