Ipcl 18-Month Paper Offers 17.18% Yield

Corporates like Tata Iron and Steel Company (Tisco), Larsen & Toubro (L&T) and Arvind Mills are offering a maximum yield of 17.45 per cent, 17.50 per cent and 18.36 per cent yields respectively.

The company is also offering a yield of 18.39 per cent on an instrument which will mature in three years.IPCL is currently in the debt market with a Rs 300-crore private placement of secured redeemable non-convertible bonds (Scheme A).

The issue, lead managed by DSP Financial Consultants, opened for subscription on September 17. The issues will close on October 8.The company, which has been rated with a AAA by Care is offering two types of bonds-scheme A and scheme B.

Under scheme A, the minimum subscription is one bond with a face value of Rs 10 lakh. The interest which is payable semi-annually has been fixed at 16.50 per cent per annum.

Although the company is offering no upfront discount to the investor for this instrument, the annualised yield on this 18-month paper works out to 17.18 per cent.

For the three-year instrument the minimum subscription is Rs 50,000 and the coupon offered is 16.50 per cent, the interest being payable semi- annually.

The company is offering an upfront discount of 2.50 per cent to the investor and the yield on the instrument works out to be 18.39 per cent. The proceeds of the NCD issue will meet a part of the cost of project for setting up an integrated petrochemical complex at Dahej (Gujarat) at an estimated cost of Rs 3,505 crore.

With the commissioning of this project by 1988, IPCL will consolidate its position as a dominant player in the polymer industry.

On the basis of sales values the polymers, fibre and fibre intermediates and chemicals contributed 69 per cent, 15 per cent and 16 per cent of IPCL's total income in fiscal 1996.