According to sources close to the situation, Vedanta Ltd., an Indian resource conglomerate controlled by billionaire Anil Agarwal, intends to raise at least 1000 crore rupees (equivalent to 105 million US dollars) by issuing local currency bonds in the coming weeks.
This move comes amid expectations that the Reserve Bank of India may raise interest rates later this year due to inflation risks. Vedanta joins a number of other Indian companies considering bond issuances.
The planned debt obligations may have maturities ranging from three to seven years. The participants in the deal are expected to be determined soon, and the funds raised from the sale will primarily be used to refinance existing debts.
This will be the third domestic issuance for the conglomerate since two previous bond sales in March, which collectively raised 7,575 crore rupees. A Vedanta representative did not immediately respond to requests for comment.
Bond issuances could help revitalize the domestic bond market after a slow start this year, as firms previously preferred bank loans due to lower rates. According to Bloomberg, Indian companies have already raised 7.7 trillion rupees through domestic bonds this year, which is 7% less than last year.
Other companies are also actively participating in the market: Gabriel India Ltd., an auto parts manufacturer, is discussing the issuance of its first domestic bonds to finance a planned acquisition, while Avenue Supermarts Ltd., a major supermarket operator, is considering a record rupee offering. Tire manufacturers Balkrishna Industries Ltd. and Apollo Tyres Ltd. have received credit ratings ahead of their planned bond issuances to raise 550 crore and 500 crore rupees, respectively.
Furthermore, the Vedanta group is in the process of strengthening its balance sheet following the spin-off of Vedanta Ltd. into five separate entities, four of which focus on aluminum, energy, oil and gas, and iron ore. Earlier this month, Bloomberg News reported that Vedanta Aluminium Metal Ltd. plans to raise approximately 13,500 crore rupees from at least three banks.