IRFC to pick up $500mn with option to retain $100mn oversubscription – raise $600mn from Overseas Bonds

New Delhi:  The Indian Railways Finance Corp (IRFC), which is looking to raise $600 million later this month, will be the first company to go for an overseas bond issue in 2014.

IRFC hopes to pick up $500 million with an option to retain an oversubscription of $100 million, DC Arya, Director (Finance), IRFC, said. Arya told FE that the coupon rate will be decided soon. “We are looking to list the issue in Singapore and plan to hold road shows sometime in the second week” he added. Indian companies raised close to $12 billion in dollar-denominated bonds last year, 750 million in euro-bonds and SGD 1.27 billion in Singapore dollar bonds. Bharti Airtel and ICICI Bank were the last two companies that mopped up overseas money last year. Bharti Airtel picked up 500 million euros, in its second issue of the year, while ICICI Bank raised $750 million. The year 2013 saw 24 overseas issues, of which the Vedanta Resources’ issue for $1.7 billion in May was the largest followed by that of Bharti Airtel and State Bank of India (SBI) at $1.2 billion and $1 billion.

Overseas bond sales in India set a record in 2013, as issuers rushed offerings before the US Fed started its taper of monetary stimulus and the quarter saw the biggest drop in dollar borrowing costs.

Data compiled by Bloomberg showed that Indian companies have sold $14.4 billion of international notes since December 31, 2012, 47% more than all of 2012 and the most since Bloomberg began compiling the data in 1999. Average dollar yields have fallen 25 bps to 5.7% this quarter, the most since the three months ended December 31, 2012.