Hindalco Industries to raise funds for up to ₹700 crore from bond sale


Hindalco Industries is looking to sell a bond for as much as 700 crore via the issuance of Non-convertible debentures (NCDs) on a private placement basis, the company informed on Wednesday. The company would seek bids on January 17, 2023 for 14-month bonds, as per a report by Bloomberg.

“..please note that the Capital Raising Committee of the Board of Directors of the Company at its meeting held on January 10, 2023, approved issuance of Non‐ Convertible Debentures (“NCDs”) on private placement basis, for an amount not exceeding Rs. 700 Crore,” Hindalco announced in an exchange filing today. Non-convertible debentures (NCDs) are aimed to be used as a financial tool to raise long-term capital.

The company, part of the Aditya Birla Group, is returning to the bond market after a decade-long hiatus, looking to raise funds to meet regulatory requirements as if the transaction goes ahead, it would the firm’s first bond sale since 2012, as per data complied by Bloomberg. Regulators in India require large companies to meet 25% of their annual funding requirements by issuing bonds, a policy designed to deepen the market.

Hindalco’s board approved a proposal to raise as much as 1,000 crore through bonds, loans, debentures and other securities in November last year. Managing Director Satish Pai said at the time that approval to raise funds through notes was to fulfill regulatory requirements.

Shares of Hindalco Industries were trading more than 2% higher at 489 apiece on the BSE in Wednesday’s deals. The metal stock is flat (up 0.3%) in a year’s period. Hindalco is an industry leader in aluminium and copper. and after its acquisition of Aleris Corporation in April 2020, through its subsidiary Novelis Inc., the company said it positioned as the world’s largest flat-rolled products player and recycler of aluminium.

(With inputs from Bloomberg)

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