Sikka Ports plans to raise Rs 4,000 cr via bonds | Economic Times

Mumbai: Sikka Ports and Terminals (SPTL), a Reliance Industries Limited (RIL) promoter group company, is likely to raise Rs 4,000 crore from a group of three large private sector lenders comprising Axis Bank, HDFC Bank and ICICI Bank, three people aware of the matter told ET.These banks are expected to subscribe to five-year bonds, the proceeds of which will be used for refinancing and capacity expansion purposes, the people said on condition of anonymity. The bonds would offer 6.75 per cent interest. Local rating companies CRISIL Ratings and CARE Ratings have graded these papers with triple-A ranks, they said. ICICI Bank and Axis Bank are likely to subscribe to a larger share of the proposed issuance while HDFC Bank may own up to Rs 1,000 crore, said the people familiar with the matter.“This is the first time in a year the company is raising money as it thinks the rate will go up from here,” said one of the persons.The bond sale could well prompt other large firms to tap into the local debt market, which is drying up in the aftermath of localised lockdowns that are aimed at checking the second wave of coronavirus but come at an economic cost.RIL and the three banks did not reply to ET’s queries.The issuance is likely to be up for bidding on Thursday on exchange platforms, they said.SPTL is part of Reliance Industries Holdings Private Ltd (RIHPL). The entities of the RIHPL group belong to the promoters and promoter group of RIL. However, it is not part of newly carved out oil-to-chemical (O2C) unit of billionaire Mukesh Ambani-controlled RIL.“The ratings continue to take comfort from the strong operating linkages of entities of the RIHPL group with Reliance Industries Limited,” CRISIL Ratings had said in a report in February.For arriving at the top grade, CRISIL Ratings combined the business and financial risk profiles of SPTL, Jamnagar Utilities & Power Private Ltd, RIHPL and other entities under its control, collectively referred to as the RIHPL group.In June last year, SPTL had raised Rs 2,000 crore via non-convertible debentures offering 7.2 per cent interest with three-year maturity.“For the purpose of handling crude oil and petroleum and petrochemical products of RIL, SPTL has entered into long-term throughput agreements with RIL for the two refineries at Jamnagar thus providing long-term revenue visibility and stable cash flows to the company,” CARE Ratings said.SPTL provides port and marine infrastructure services at village Sikka in district Jamnagar for handling crude and evacuation of petroleum and petrochemical products of RIL. The company is also engaged in operating and hiring construction equipment and machinery. It is a co-developer of Jamnagar Special Economic Zone. It handles a major part of RIL’s refining and petrochemicals volumes, said CRISIL Ratings.