Torrent Power lines up biggest debt sale yet to bankroll coal deal

India's Torrent Power is set to inaugurate the first acquisition-funded corporate bond sale of the current financial year, in what would be the company's largest debt issuance to date, three merchant bankers told Reuters on Thursday.

The power producer plans to raise as much as 40 billion rupees ($421.8 ‌million) through ⁠the sale ⁠of longer-tenor bonds, which may feature staggered redemptions similar to its previous issue, the bankers ​said.

The company is expected to tap the market in May, with discussions likely to ​conclude within the next week.


"The company has also tied up with some mutual funds, so it is highly possible that they end up ​splitting the quantum in shorter as well as ⁠longer tenors," ‌one of the bankers said.

The bankers requested anonymity ​as they ​are not authorised to speak to the media. Torrent ⁠Power did not immediately respond to a Reuters request for ​comment.

The bonds are rated AA+ by Crisil and India Ratings.

In March, the company had raised 20 billion rupees through staggered redemption bonds maturing in eight years, nine years and 10 year at an annual coupon of 7.97%.

Proceeds from the latest bond sale will be used to acquire another firm after India's competition regulator approved Torrent ‌Power's purchase of 100% shares in Nabha Power earlier this month.

In February, Torrent Power said it would purchase a coal-fired ​power plant ​operator from Larsen & ⁠Toubro for about 69 billion rupees, including debt, as it steps up capacity in the region.

Nabha Power operates a 1,400-megawatt coal-based plant in the northern state ​of Punjab and supplies all its output to the state power corporation under a 25-year contract.

The deal will add to Torrent Power's recent push to scale up its thermal portfolio, as utilities turn to coal-based capacity to meet India's rising electricity demand. ($1 = 94.8400 Indian rupees)