Reliance Holdings raises $1 billion through 10-yr bonds


Reliance Holdings USA Inc, a wholly-owned subsidiary of RIL, sold 5.4% senior, unsecured notes maturing in February 2022 at 345 basis points more than similar-maturity Treasuries. The Notes have been priced at 345 basis points over the 10-year US Treasury Note

New Delhi: Reliance Industries (RIL) Friday said its US subsidiary has raised $1 billion selling 10-year dollar-denominated debt, the largest overseas bond sale from an Indian company in nine months, reports PTI.

Reliance Holdings USA Inc, a wholly-owned subsidiary of RIL, sold 5.4% senior, unsecured notes maturing in February 2022 at 345 basis points more than similar-maturity Treasuries, the company said in a press statement here.

“The Notes have been priced at 345 basis points over the 10-year US Treasury Note, at a price of 99.481% to yield 5.468%,” it said.

Reliance Holdings will use the proceeds to fund its ongoing capital expenditure, to make business investments, to refinance its existing debt and for general corporate purposes.

“The transaction was well executed despite the short time-window and a volatile global environment,” RIL joint chief financial officer V Srikanth said.

Bank of America Merrill Lynch, Barclays Capital, Citigroup Global Markets Inc, The Hongkong and Shanghai Banking Corporation and UBS AG, Singapore Branch acted as joint book-runners and lead managers.

“In terms of geographic distribution, the Notes were distributed 31% in Asia, 17% in Europe and 52% in the United States,” the statement said.

The issue, which is the first corporate bond from India in 2012 and first since August 2011, was over-subscribed nearly 8 times with an order book aggregating $7.8 billion.

The bonds were distributed to high quality fixed income accounts: 65% to fund managers, 15% to insurance funds, 10% to banks, 5% to private banks and 5% to government agencies.





5 years ago

incredible; hope the source of the funds is traced;

Sideways move on the cards: Friday Closing Report

Nifty may move sideways between 5,290 and 5,425

The market settled lower as poor industrial output numbers for December and unending European woes weighed on investors. With a lower volume of 96.62 crore shares on the National Stock Exchange, the Nifty once again made a higher high and higher low. However, the intraday range of the index doesn’t indicate any strength for a major move. From here, we may see the benchmark moving sideways between 5,290 and 5,425.

The market opened marginally lower this morning, ahead of the industrial output data for December 2011 and on weak cues from Asia. Although Greek policymakers managed to sew a deal on economic reforms and austerity measures on Thursday, Wall Street settled with small gains overnight. The nervousness was reflected in Asia as bourses in the region were trading mostly lower in morning trade. Back home, the Nifty opened 12 points lower at 5,400 and the Sensex lost 13 points to resume trade at 17,818.

Value picking kept the indices in the positive for a major part of the morning session. While the Nifty touched its intraday high of 5,427 in the first half hour itself, the Sensex rose to its high of 17,890 at around 10.50 am.

However, with industrial output numbers for December 2011 coming in at a mere 1.8%, the market began to drift lower in pre-noon trade. Subdued European market in early trade, as Eurozone finance ministers put tough conditions before approving a bailout package for Greece, added to the woes in the domestic market in the second half of the trading session.

The indices touched the low-point of the day at around 1.30pm with the Nifty falling to 5,341 and the Sensex going back to 17,627. While the market made a small recovery, it closed with a loss of around 0.50%. The Nifty settled at 5,382, down 31 points and the Sensex ended the session down 82 points at 17,749.

The advance-decline ratio on the NSE was in favour of the decliners at 836:953.

The broader indices witnessed a flat ending with a mixed bias. The BSE Mid-cap index rose 0.11% while the BSE Small-cap index lost 0.02%.

With the exception of the BSE Metal index (up 0.58%), all others settled lower. The top losers were BSE Realty (down 0.93%); BSE Oil & Gas (down 0.80%); BSE Healthcare (down 0.71%), BSE Bankex (down 0.68%) and BSE Power (down 0.41%).

Despite posting a dismal performance for the third quarter, Tata Steel emerged as the top gainer on the Sensex (up 5.30%). Other key gainers were Bajaj Auto (up 2.10%); Wipro (up 0.80%); TCS (up 0.29%) and ITC (up 0.17%). The losers were led by Hindalco Industries (down 3.62%); Maruti Suzuki (down 1.99%); Mahindra & Mahindra (down 1.36%): Reliance Industries (down 1.23%) and ICICI Bank (down 1.21%).

Tata Steel (up 5.12%) also was the top performer on the Nifty. It was followed by SAIL (up 3.72%); Bajaj Auto (up 2.25%); Sesa Goa (up 2.05%) and HCL Technologies (up 1.19%). Hindalco Ind (down 4.34%); Ambuja Cements (down 4.04%); Reliance Infrastructure (down 3.97%); ACC (down 3.66%) and IDFC (down 3.19%) settled at the bottom of the index.

The Asian pack, with the exception of the Chinese benchmark, closed in the negative as investors were worried whether the Greek debt restructuring deal would hold. In economic news, Chinese imports recorded a 15.3% drop in January, the lowest since August 2009, while exports fell 0.5%last month, signalling lower demand.

The Hang Seng declined 1.08%; the Jakarta Composite tanked 1.67%; the KLSE Composite fell by 0.23%; the Nikkei 225 decreased by 0.61%; the Straits Times dropped 0.71%; the Seoul Composite lost 1.04% and the Taiwan Weighted ended 0.61% lower. Bucking the trend, the Shanghai Composite added 0.10%. At the time of writing, the key European bourses were trading weak and the US stock futures were in the negative.

Back home, foreign institutional investors were net buyers of shares totalling Rs1,200.66 crore on Thursday, whereas domestic institutional investors were net sellers of equities amounting to Rs1,037.58 crore.

Godrej Properties (GPL), the real estate arm of Godrej Group, today launched its first venture in Chennai, the Rs450 crore 'Godrej Palm Grove'. Pirojsha Godrej, executive director of the company said 1,556 modern apartments would come up over 12.5 acres along NH-4 Bengaluru Highway ranging from 1,188 sq ft to 1,489 sq ft. The stock declined 1.86% to close at Rs644 on the NSE.

The income Tax department today conducted simultaneous searches in offices and manufacturing facilities of Hyderabad-based Aurobindo Pharma. The searches assumed significance as these were carried out ahead of the company’s board of directors' meeting to consider the unaudited financial results for the quarter ended 31 December 2011. The stock tumbled 6.18% to close at Rs110.15 on the NSE.

Elecon Engineering Company has been awarded an order worth Rs12.95 crore from The Indure, New Delhi. The order envisages supply, transportation, erection and commissioning of reversible stacker cum reclaimer with tools and tackles, mandatory spares and commissioning spares for 2x525 MW Monnet Thermal Power Project located at Angul in Orissa. The scrip fell 0.23% to settle at Rs64.70 on the NSE.


Equity fund flows: A slow start to the year for the fund industry

Despite a positive month for the Indian market, sales of equity funds in January failed to pick up

In January the Sensex gained 11% but this didn’t seem to interest equity mutual fund investors. After a month of inflows into equity mutual funds, January saw an exodus of Rs380 crore from equity funds. Sales declined and redemptions increased. Though sales of ELSS schemes picked up marginally, sales of other equity funds declined further compared to the previous months. Sales of equity funds have been declining since August 2011. (Read: The volatility and uncertainty in the market over the past few months and higher interest rate in safe products may have caused investors to divert their funds to safe havens like bank fixed deposits.

For the financial year to date (April 2011 to January 2012) we have seen an inflow of Rs2,860 crore into equity funds, which is much better compared to the year to date for the previous year (April 2010 to January 2011) which saw a huge outflow of Rs16,434 crore. However, the cause for concern is declining sales. For the same period of the previous year, total sales amounted to Rs55,187 crore, whereas for the current year the sales were just Rs41,755 crore a decline of nearly 25%.

The sales of equity funds in January 2012 amounted to just Rs3,029 crore which was less than half of that reported in January 2011 where the total sales amounted to Rs7,267 crore. Sale of ELSSs too which usually pick up during this time of the year was considerably less compared to that of last year. The redemptions may have been lower compared to the same month the previous year, but it was higher than the total sales. The total redemptions from equity mutual funds stood at Rs3,409 crore which was considerably higher to that of December last year

This month saw no new fund offers (NFOs). In the last twelve months there have been just 11 NFOs launched including one ELSS. The same period the previous year saw 20 NFOs being launched. In fact, the have been no new funds launched in the last two months.

The market rally over the past few weeks may just entice investors to put their money in mutual funds and hopefully February may see some inflows.


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