Hal To Float Rs 100 Crore Aero Bonds To Raise Rs 100cr

Premier defence PSU Hindustan Aeronautics Limited (HAL) will raise Rs 100 crore through private placement of non-convertible secured redeemable bonds called aero bonds. This is the first fund raising exercise by a defence PSU. These PSUs have traditionally relied on budgetary resources.Allianz Capital and Management Services Limited, the sole manager to the issue, said yesterday that the placement will come with a green shoe option to retain oversubscription to the extent of Rs 50 crore.

The bonds have been designed to be issued through the book building process and rated LAAA by Icra, which signifies the highest safety for funds. They will carry a coupon rate in the range of 12 per cent and 12.50 per cent per annum and a maturity of five years with staggered redemption equally at the end of the fourth and fifth year and a put and call option at par at the end of three years. The company, along with the arranger, expects the cut-off rate in the range of 12.25 per cent per annum. This is the maiden private placement of the company and is expected to garner a good response from the investors.

segment considering the fact that the yields on the market are going down. It is expected to receive the maximum support from the banking sector, debt funds and others. HAL, a premier PSU, has substantial reserves and profits and has been paying a dividend of 10 per cent over the years and enjoys an AAA rating.