State-owned gas utility GAIL India Ltd on Thursday said its board has approved raising up to Rs 1,500 crore in debt to part-fund its ambitious plan to expand its pipeline capacity over the next few years. The company plans to raise funds through domestic bonds in one or more tranches in the next six months.
“The Board of Directors in its meeting held today inter alia approved to borrow rupee debt funds up to Rs 1,500 crore including greenshoe option through secured/unsecured, redeemable, taxable non-convertible bond(s) in one or more tranches from time to time on private placement basis,” the company said in a regulatory filing. Greenshoe option allows a company to borrow more than the notified amount if it gets a favourable cost of borrowing.
GAIL had in May last year tied up Rs 2,000 crore loan from State Bank of India (SBI) to meet its capital expenditure requirements over the next few years, particularly in the pipeline projects. It plans to add 5,500 km of gas pipeline in phases over the next three years as part of government’s efforts to raise the share of natural gas in India’s energy mix to 15 per cent by 2030 from current 6 per cent.
The company presently operates a pipeline network of 10,977 km across the country. GAIL’s major pipeline projects currently under implementation are the 2,655-km Jagdishpur–Haldia and Bokaro–Dhamra pipeline, 670-km Vijaipur–Auraiya–Phulpur pipeline, and 879-km Kochi-Koottanad–Bengaluru–Mangaluru pipeline.