The State-promoted Gujarat State Petroleum Corporation Ltd (GSPC) has raised Rs 3,000 crore from the bond market to meet the capital expenditure requirements for the ongoing exploration and production (E&P) activities, and to re-finance the existing higher cost short-term loans.
GSPC has entered the bond market for raising Rs 3,000 crore of corporate debt by issuing three different bonds having maturities of 8, 10 and 60 years, respectively. “The issue met with an overwhelming response from the financial market and against the total size of Rs 3,000 crore (including green-shoe option of Rs 1,500 crore), the total bids were received for Rs10,100 crore,” a company official said here.
The 8-year and 10-year bonds were rated as ‘AA’ by CRISIL and ‘AA+’ by CARE. For the 60-year bonds, the ratings assigned by the two agencies were ‘AA-’ and ‘AA,’ respectively.
Despite the challenges of current financial market conditions, all bonds were raised at “very competitive” interest rates of 9.39 per cent for 8-year bonds, 9.45 per cent for 10-year bonds and 10.45 per cent for 60-year bonds. These are among the lowest rates for this rating category of bonds in the last one year. “In fact, till date, only Tata Power and Tata Steel have been able to raise funds through the perpetual/60-year term bonds and the interest payable by GSPC is lowest-ever in this segment,” the official said.
According to a company statement, this became possible due to a transparent process which involved “very aggressive” bidding response from the top merchant bankers of the debt market in India.
IPO
GSPC had been trying to raise about Rs 4,000 crore via the IPO route to fund its activities in the Krishna-Godavari Basin, but had to postpone its efforts in the last five years. In 2010, it tied up for Rs 3,000 crore term loans through a consortium of 15 banks led by Bank of Baroda, to finance its Deen Dayal West (DDW) field in the K-G Basin on the coast of Andhra Pradesh, and develop it for commercial production.