Telangana, UP And Kerala Firms Eye Rs 22,000-Crore Via Bonds — Exclusive

State-government backed entities from Telangana, Uttar Pradesh and Kerala are chalking out plans to raise as much as Rs 22,000 crore through bonds, two people aware of the development told NDTV Profit.

Telangana State Industrial Infrastructure Corp. plans to raise up to Rs 10,000 crore through bonds maturing in 10 years and may tap the debt market in the first half of December, a person involved in the transaction said. The state government owned entity develops industrial areas in Telangana.

The company aims to raise funds through separately transferable redeemable principal part bonds, where the principal and coupon payments are stripped, and sold separately to investors who want a fixed income on a particular due date. In this case, the tenure of these separate bonds range between three and 10 years.

On Monday, India Ratings and Research assigned AA rating to the company's Rs 10,000 crore bond issue.

Proceeds from this issue will be used for identification and acquisition of land for the development of industrial parks, industrial corridors, provision of infrastructure facilities, allotment and sale of land to private companies for setting up industrial units in industrial parks, according to term sheet accessed by NDTV Profit.

Another large issue that the corporate bond market might witness would be from power distribution company Uttar Pradesh Power Corp. The company plans to raise up to Rs 10,000 crore in the current financial year and is likely to bring out its first tranche of Rs 5,000 crore in December or January, the person said.

While the company is looking at issuing a 10-year bond, it is yet to finalise the details as well as merchant bankers for this.

So far, they have short-listed a consortium of three merchant bankers—AK Capital Services, Tipsons Group and Trust Investment Advisors, people quoted above said.

The last time Uttar Pradesh Power Corp. had tapped the corporate debt market was in October 2022, when it raised nearly Rs 3,500 crore through 10-year government-serviced bonds at a coupon of 9.95%. At the time, the bonds were rated A+ by India Ratings & Research.

Kerala Infrastructure Investment Fund Board is also making enquiries to raise up to Rs 2,000 crore and may hit the market before the end of December, the person said.

The company is likely to appoint merchant bankers for this issue by mid December and will tap the market by Dec. 20. However, this bond issue might get delayed because of Telangana State Industrial Infrastructure's large bond issue.

In October, KIIFB had raised Rs 1,000 crore through STRPP bonds.

Earlier this week, 12 states raised over Rs 30,000 crore through state development loan auctions. This included states like Andhra Pradesh, Arunachal Pradesh, Bihar, Goa, Gujarat, Tamil Nadu, etc. The 10-year bonds were raised at coupon rates ranging between 7.14-7.18%.