SP Jammu Udhampur Highway (SPJUHI) is likely to raise Rs 2,610 crore through its long-term annuity-based bonds at a semi-annual coupon rate of 9.15%, sources close to the deal told FE.
“The issue has received a good response and the pricing of the bond issue was done last week,” a source indicated, adding that the tenure of the bond is close to 16 years in the form of semi-annual strips maturing from December 2015 to December 2030.
Kotak Mahindra Bank and HSBC were the arrangers to the deal, according to the source who said that the pay-in date for the bond issue is likely to be on August 5 or August 6.
“This transaction hopefully is going to open up the capital markets route for a lot of Indian infrastructure financing — a long stated endeavour and hope of the Reserve Bank of India,” a banker close to the deal said.
“Everywhere in the world the capital markets play an equally important role (as much as banks) in funding infrastructure projects. Finally, it would appear that well-structured infrastructure projects backed by credible promoters are finding takers in the capital markets,” the banker stated.
A source said that the range of investors for the bond issue is spread across the entire spectrum, i.e. mutual funds, insurers, banks etc. “We may see some FPI interest also,” the banker said.
The bonds have been rated AAA (SO) (Stable) by ratings agency ICRA. “The rating reflects the operational status of SPJUHI’s road project and the fact that the project is annuity-based thereby eliminating construction and traffic risks,” ICRA said in a report, adding that the rating takes support from the strong profile of SPJUHI’s counter-party and annuity provider — NHAI.
SPJUHI is an SPV promoted by Shapoorji Pallonji Roads (74%) and SPCPL (26%) for strengthening and four-laning of 64.58 km of Jammu-Udhampur section from km 15 to km 67 on NH 1A in Jammu & Kashmir on build, operate and transfer (BOT) annuity basis, says an ICRA report.
It also said that the existing project loan, including rupee and external commercial borrowing (ECB) loan will be entirely refinanced through the NCD issuance.
After having witnessed some dull period, the corporate bond market has seen a flicker of activity in the recent few weeks.
Indian Railway Finance Corporation (IRFC) may soon approach the bond market to raise close to R1,800 crore via private placement of tax-free bonds, according to market experts.
In the regular corporate bond segment, Nuclear Power Corporation of India (NPCIL) is looking to issue long-tenure bonds to raise between Rs 2,500 crore to Rs 3,500 crore and the company has sought bids from arrangers on July 29, sources indicated.