M&M raises $83M through NCD issue with 50-year maturity

Automobile major and the flagship firm of diversified Mahindra Group, Mahindra & Mahindra Ltd (M&M) has raised Rs 500 crore ($83.06) through issue of non-convertible debentures (NCDs), as per a stock market disclosure.

"The NCDs will be unsecured, rated, listed and redeemable at the end of 50th year and will carry a coupon of 9.55 per cent per annum payable annually," the firm said in the filing.

Credit rating agencies CRISIL and ICRA have assigned AA+/stable rating to the issue. Yes Bank acted as the sole arranger and underwriter for the deal.

The money raised will be used for capex, long-term working capital requirements and re-financing of loans.

Although other Indian companies have offered such long tenure bonds in the overseas market, this is the first ever Indian rupee denominated NCD issue with a 50-year bullet maturity offered by an Indian corporate. In 1997, Reliance Industries became the first corporate in Asia to issue 50 and 100 years bond in the US debt market.

"This is a benchmark deal as it has explored an uncharted maturity horizon and tries to extend the corporate bond yield curve beyond 30 years in the Indian bond market. It helps create space for our company's future capital market offerings," said VS Parthasarathy, CIO and  EVP - M&A, finance and accounts, at M&M.

(Edited by Joby Puthuparampil Johnson)

Leave Your Comment(s)