Mumbai: Adani Gas Ltd, the city gas distribution business of Gautam Adani-led Adani Enterprises Ltd, is planning to raise money by selling dollar bonds, two people aware of the development said.

Adani Gas supplies piped natural gas (PNG) to households and industries and compressed natural gas (CNG) for use as auto fuel.

The company could raise around $250 million, one of the two people cited above said, requesting anonymity as he is not authorized to speak with the media.

“They are considering raising funds for the city gas business through a bond issuance in the offshore markets. It is in early stages of discussions right now. The company could raise anywhere between $250-300 million through such a bond issuance," he said.

According to the second person cited above, the company is likely to raise these funds for retiring existing debt obligations as well as for investment in business operations. He too requested anonymity.

Emails sent to Adani Group last week were not answered till press time.

The company has set up city gas distribution networks at Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana and Khurja in Uttar Pradesh.

In addition, the firm has won the contracts for development of Allahabad, Chandigarh, Ernakulam, Panipat, Daman and Dharwad gas distribution, in a consortium with state-owned Indian Oil Corporation Ltd.

This year, Indian corporates have aggressively tapped bond markets to either refinance existing debt or raise fresh capital.

According to a Thomson Reuters report, Indian issuers raised a total of $51.1 billion in the first nine months of 2017 through primary bond offerings, an 18% increase compared to the same period last year. This is the highest amount ever raised from primary bond offerings in the first nine months of any year.

Offshore dollar bonds too have seen a sharp increase in interest this year, Thomson Reuters reported.

Indian issuers raised $8.7 billion through dollar-denominated bonds, up 44.3% from a year ago.

Earlier this month, GMR Hyderabad International Airport Ltd raised $350 million through dollar bonds to refinance debt.

Other major dollar bond sales this year include renewable energy firm Greenko Group’s $1 billion issue in July and Vedanta Resources’ $1 billion sale in August. Both were aimed to refinance existing debt obligations.

State-owned companies too have tapped the liquidity in the debt markets to raise funds.

In January, Bharat Petroleum Corp. Ltd (BPCL) raised $600 million by selling 10-year dollar bonds, while in July, Hindustan Petroleum Corp. Ltd (HPCL) raised $500 million through its first 10-year dollar bonds issue.

Adani group company Adani Transmission Ltd, is planning to raise fresh equity capital of up to Rs3,000 crore through a qualified institutional placement (QIP), Mint reported on 24 August.

In October, Reuters had reported that Adani Enterprises Ltd aimed to tie up financing for its Carmichael coal mine project in Australia by March 2018, adding that it would look to sell a minority stake in the project to help raise funds.

In July, Reuters reported that Adani Group had raised $250 million via an offshore loan to invest in its solar power project in Karnataka.

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