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ReNew Power, Exim Bank tap dollar funds
Easy global liquidity, benign interest rates and a stable rupee have overshadowed Indo-Pak tension as overseas investors continue to latch on to dollar debt from the country. Two more Indian companies, wind and solar energy company ReNew Power and trade financier Exim Bank, were in the market to together raise $900 million to take the total dollar funds raised from Indian companies to $4.7 billion so far this calendar year.
Exim, a routine dollar borrower, raised $500 million selling fiveyear bonds to investors in Asia and Europe at 140 basis points above the five year US treasury. One basis point is 0.01 percentage point. ReNew Power has raised $375 million by selling five year bonds priced at 6.67 per cent.
HSBC was the lead banker for both the issues. “Both these issues are the first after escalation of tension on the border and it just goes to show that investors are convinced about the Indian paper despite the uncertainties. In fact, this year has seen a strong start for issues out of India after a quiet second half last year,” said a banker involved in the issue.
Total dollar funds from India are expected to touch $4.7 billion after the two latest issues, higher than $3.6 billion raised by Indian companies in the same period last year. Issuances from India are on course to beat the $6.50 billion raised in 2018, bankers said.
“Indian high quality credit have always had a strong investor appetite and given the scarcity in 2018, investors have a strong appetite for quality credits out of India in 2019 as evident from the phenomenal response to recent Indian issuances e.g. SBI, BPCL, Oil India, etc,” said Ashwini Kapila, MD, Barclays India.
Bonds from emerging markets have bounced back driven by dovish US Federal Reserve commentary and the noise around lower growth in US. This has led to solid flow into emerging market fixed income funds which have seen eight straight weeks of inflow, Kapila said.
Barclays was one of the four banks in the ReNew Power issue. Ten dollar bonds issuances would have happened by late evening on Tuesday including the latest two and bankers say more are in store. Power producer NTPC, railway financier IRFC, Jubilant Pharma, IndusInd Bank and Canara Bank are other companies lining up.