While companies are shying away from capital expenditure amid a slowing economy, billionaire Kumar Managlam Birla-promoted Hindalco Industries has achived financial closure for Rs 9,896 crore debt for its greenfield smelter project at Lapanga in Odisha in one of the largest syndication in recent times.
The Aditya Aluminium smelter has a proposed aluminium production capacity of 359,000 tonnes backed by captive power plant of 900 MW. The plant is expected to be among the lowest cost producers globally.
The project having total cost of Rs 13,195 crore has a debt equity ratio of 75:25. The debt is priced at 125 basis points higher than State Bank of India’s base rate and has a tenor of 12.5 years. The rate currently works out to be 11.25 per cent per annum.
“The company has in recent months successfully tapped both the domestic bond market as well as the loan market to meet its financing needs – in both cases having achieved benchmark financing terms,” said Alphonso Richard Das, president finance at Hindalco.
The rupee term loan facility syndicated by SBI Capital Markets and IDBI Bank saw over 2.25 time subscription with 28 commercial banks and financial institutions participating.
“The amount raised is a demonstration of the confidence that the banking community has shown in the Company and manufacturing industry in general,” said Rajat Misra, senior vice president at SBI Capital Markets.
The stock of the company was down by 0.72 per cent to Rs 117.25 on Bombay Stock Exchange. Sensex, the benchmark index of the exchange was up by 0.42 per cent to 18542.31 on the day.
“The work on Aditya Aluminium has been progressing as expected and the debt raising is also in line with the expectation,” said Bhavesh Chauhan, analyst at Angel Broking, a Mumbai based brokerage.
