India’s JSW Group plans to raise 70 billion rupees ($790 million) through the issuance of zero-coupon bonds before the end of September to finance an acquisition, three merchant bankers said on Thursday.
JTPM Metal Traders, a holding company within the group, will issue the bonds, which mature in four years and seven months, with bidding set to open on Monday, the bankers said. The notes will carry a yield of 8.50% and feature put and call options at the end of three years, they added.
The funds will support JSW Paints’ acquisition of up to a 75% stake in the Indian unit of Dutch paint maker Akzo Nobel, a deal approved last week by the Competition Commission of India, Reuters reported.
JSW Group did not respond to an email request for comment from Reuters. The bankers requested anonymity as they were not authorised to speak to the media.
Indian companies have been increasingly turning to the bond market to fund acquisitions, driven by robust demand from mutual funds, merchant bankers and investors, said. Eight major mutual funds, along with other entities, are expected to act as anchor investors in the JSW bond issuance, contributing about 21 billion rupees, the bankers said.
The notes are rated AA by Crisil and Care Ratings. According to Crisil, proceeds from the bond issue may also be used for infusing capital into operating companies within the group or for debt refinancing.
Reuters
