Mumbai: Sterlite Industries India Ltd, a unit of mining group Vedanta Resources Plc., plans to raise up to Rs6,912 crore ($1.6 billion) in a syndicated loan, two banking officials with direct knowledge of the matter said on Wednesday.
The loan will be the biggest issue in the rupee-denominated market so far in 2008. “We are seeing good demand coming in from investors,” said one banker on the condition of anonymity as he was not authorised to speak to the media.
SBI Capital Markets Ltd, IDBI Bank Ltd and Deutsche Bank AG are the bankers to the deal, the officials said. The funds are being raised for utility Sterlite Energy Ltd, a fully owned subsidiary of Sterlite Industries, India’s top non-ferrous metals maker.
Sterlite Energy, which is building a 2,400MW power plant in Orissa, had hoped to finance the project through an initial public offering (IPO), the bankers said. Vedanta group chairman Anil Agarwal had said in January the IPO was likely in the next few months but a falling stock market scared off prospective issuers.
Demand for syndicated loans in India remains strong and have surged 57.1% to $21.4 billion so far this year, compared with the same period in 2007, Thomson Reuters data showed. This is in contrast to loans raised overseas by companies worldwide. Global offshore loan volume in the first half slumped 23% to $9 billion from the same period in 2007, data from Reuters Loan Pricing Corp. showed, largely due to risk aversion in the wake of credit problems in the US. Still, Vedanta Resources sold $1.25 billion notes in a two-part sale last month. It priced the $500 million 2014 bond at 8.75% and the $750 million 2018 bond at 9.50%.
Reliance Industries Ltd is currently in the market to raise a $1 billion five-year offshore loan.