IOC raises Rs 1,500 cr via bonds at interest rate lower than sovereign
State-owned Indian Oil Corporation (IOC) on Friday said it has raised Rs 1,500 crore through a bonds issue at a coupon rate of 6.14 per cent to refinance existing borrowing.
The interest rate that IOC, the nation’s largest oil company, will pay is less than the yield on government bonds. “The company has issued 15,000, 6.14 per cent unsecured, listed, rated, taxable, redeemable, non-convertible debentures (Series-XXI) of Rs 10,00,000 each aggregating to Rs 1,500 crore on private placement basis on February 18, 2022,” IOC said in a stock exchange filing.
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The firm got bids worth Rs 5,403 crore in the range of 5 per cent to 6.7 per cent for its issuance. It priced the five-year rupee bonds at a coupon rate of 6.14 per cent tighter than a similar maturing government bond that is trading at an annualised yield of 6.29 per cent. “The issue saw strong demand from investors and we were able to get a very attractive deal,” IOC Director (Finance) Sandeep Gupta said.
The issue marks the return of the company to the onshore bond market after a gap of more than a year. “The funds raised through this issue will be utilised for, inter alia, refinancing of existing borrowing and/or funding of capital expenditure of the company, including recoupment of expenditure already incurred and/or for any other purpose in the ordinary course of business of the issuer,” IOC said.
IOC owns and operates oil refineries with a total capacity of 80.7 million tonnes per annum or 32.5 per cent of India’s oil refining capacity. It also has 32,888 out of 79,417 petrol pumps in the country. IOC services 13.8 crore LPG customers through 12,766 distributors and has 122 aviation fuel stations.
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