Bharti Airtel Ltd, YES Bank Ltd and mortgage lender Housing Development Finance Corporation are looking to raise funds through bond issues on the London Stock Exchange, the three companies said separately.
Bharti Airtel, India’s largest telecommunication services provider, said it is looking to raise up to £500 million (Rs 5,030 crore) through its first bond issue in the currency that will listed on the LSE.
YES Bank plans to list $500 million (Rs 3,300 crore) of the so-called green bonds on the LSE by December 2016, India’s fifth-largest private-sector lender said on Thursday. Green bonds are debt instruments used to raise capital to fund renewable energy and emission reduction projects.
HDFC announced plans to raise $750 million (Rs 4,960 crore) by issuing the so-called masala bonds in London, in the first such issuance from an Indian private-sector company. Masala bonds are offshore rupee-denominated debt securities.
Meanwhile, State Bank of India has signed an agreement with FTSE Russell, a global index provider to launch India’s first bond index.
The FTSE SBI bond index will be developed in partnership with FTSE TMX Global Debt Capital Markets and will track Indian fixed-income securities. SBI Mutual Fund, the bank's asset management unit, intends to use the new index as the basis for a new investment product.
The SBI-FTSE agreement and plans for the three bond sales come in the backdrop of Prime Minister Narendra Modi’s ongoing visit to the UK.
Green bonds
YES Bank said it has signed an initial pact with the London Stock Exchange Group to collaborate on bond and equity issuance, with focus on green infrastructure finance. The bank also aims to raise more funds in London, potentially through the listing of Global Depository Receipts, as part of its plan to mobilise $1-billion (Rs 6,600 crore) of equity capital.
Green bonds have become important in the context of the Indian government's ambitious target of building 175 gigawatt of renewable energy capacity by 2022, from about 30 gigawatt now. Such bonds are usually issued in dollars, but they can be issued in rupees as well.
In February, YES Bank raised Rs 1,000 crore via a 10-year green bond. The next month, the Exim Bank of India issued India’s first dollar-denominated green bond. In August, the International Finance Corp, supported by YES Bank, listed rupee-denominated green bonds worth Rs 315 crore on the LSE.
In the last two years, London has established itself as the leading centre for offshore rupee debt issuance, or the so-called masala bonds. Besides IFC's green masala bonds, the Asian Development Bank has also issued rupee debt.
Bharti Airtel's plan
The telecom operator said that the planned bond sale, once completed, will help it diversify its fund-raising sources. The company will use the money raised from the issue to refinance some of its existing debt, Bharti Airtel Group Treasurer Harjeet Kohli said in the statement.
The bond issue and timing are subject to necessary authorization and approvals, global credit environment and market conditions, it said.
Bharti Airtel has previously issued bonds in US dollars, euros and Swiss francs listed on the Singapore, Frankfurt and Swiss stock exchanges.
In June, the company had raised $1 billion by issuing 10-year notes to overseas investors. The sale was oversubscribed two times.
With operations in 20 countries across Asia and Africa, Bharti Airtel ranks among the top five mobile service providers globally in terms of subscribers. It has made a few overseas acquisitions in the past, including buying Zain's African assets that has stretched its balance sheet.
