Vedanta plans third rupee bond issue, seeks to raise ₹1,000 crore

Vedanta Ltd., the Indian resources conglomerate controlled by billionaire Anil Agarwal, plans to raise at least ₹1,000 crore ($105 million) through local-currency bonds in the next few weeks, according to people familiar with the matter, as more companies tap the debt market amid signals interest rates may rise.

The planned notes will have maturity that could range between three years to seven years, the people said, asking not to be identified discussing private information. The proceeds will largely be used to refinance debt, they said, adding that the bankers participating are likely to be finalized soon.

It would be the conglomerate’s third domestic issuance since raising a total of ₹7,575 crore through two bond sales in March. A representative at Vedanta didn’t immediately respond to an email seeking comment.

Vedanta joins other Indian companies that are mulling bond offerings soon amid expectations that the Reserve Bank of India could raise interest rates later this year due to inflation risks. The deal pipeline would help boost the domestic bond market after a slow start this year as firms opted for bank loans to meet financing needs due to lower rates.

Indian companies have borrowed ₹7.7 trillion via domestic bonds so far this year, down 7% from a year ago, according to data compiled by Bloomberg.

Gabriel India Ltd., an auto parts manufacturer, is in discussions for its first-ever local bonds to fund a planned acquisition, while Avenue Supermarts Ltd., a major supermarket operator, is mulling a record rupee-denominated offering. Tyre makers Balkrishna Industries Ltd. and Apollo Tyres Ltd. have secured credit ratings ahead of plans to issue notes to raise ₹550 crore and ₹500 crore, respectively.

Vedanta Group is in the process of shoring up its balance sheet after listed entity Vedanta Ltd. was split into five separate companies, with four focusing on aluminum, power, oil and gas, and iron ore. Vedanta Aluminium Metal Ltd. is said to be planning to raise about ₹13,500 crore from at least three banks, Bloomberg News reported earlier this month.