State-run Oil and Natural Gas Corporation (ONGC) has raised $300 million dollar bond for meeting its capital expenditure.
The bonds will bear a coupon of 3.375% and will mature in 2029. This is the tightest coupon for 10 year or longer tenor offering from India ever achieved by any Indian Corporate.T he company said in a statement on Thursday that the mix of investors is diverse, from across Singapore, HK, London, Taiwan, Japan and Middle East, which includes 77 per cent bid from Asian investors and 23 per cent from Europe, the Middle East and Africa (EMEA) investors. The bankers to the deal were – Citi, DBS Bank Ltd, MUFG, SBICAP and Standard Chartered.
For the financial year 2019-20, ONGC has lined up a capital expenditure of Rs 32,921 crore. ONGC chairman and managing director Shashi Shanker said that ONGC funds its operations from internal accruals and it has capacity to do the same in future also. The offering of dollar bond, however, was important to set a benchmark for ONGC group which has become an integrated energy major post acquisition of HPCL. It is anticipated that once the benchmark is set, it will facilitate group entities to raise funds at a competitive price.
ONGC Director (Finance) Subhash Kumar added that the yield achieved in the exercise was one of the best which further reinforces the credentials of ONGC as an integrated energy major. It is also expected that this issuance will enhance the group visibility in international market which will also pave way for upgraded corporate governance.