State-run GAIL (India), which launched its bond issue yesterday, saw it being oversubscribed about five times. The company had launched a bond issue of Rs 500 crore, with a green shoe option of Rs 250 crore.
The total quantum of Rs 750 crore was mobilised at a cut off rate of 9.14 per cent which was “the lowest rate achieved in recent times”, GAIL said in a press statement to the Bombay Stock Exchange. Proceeds of the issue would be used to partly meet the firm’s capex plan for expansion. It would be repaid in five to eight years, with a call option at the end of the fifth year. Weak GDP numbers have sparked rate cut hopes, resulting in a rally in bond prices and spurring demand for corporate paper, say analysts.
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