New Delhi: In a fillip to repayment of Air India's debt, Air India Assets Holdings Ltd (AIAHL) on Monday raised Rs 7,000 crore through bonds sale at a lower rate and the issue was oversubscribed more than 20 times.
A special purpose vehicle of Air India, AIAHL came out with its maiden bond issue for Rs 1,000 crore with an option to retain additional subscription worth up to Rs 6,000 crore. The bonds are fully-backed by the government.
AIAHL Chairman and Air India CMD Ashwani Lohani said the positive response received from all categories of investors would act as a stimulus to the disinvestment process of Air India Ltd.
The funds, raised at a lower rate, would be utilised to partly repay Air India's debt, which is more than Rs 58,000 crore.
An Air India spokesperson on Monday said AIAHL's bond issue with a three-year tenure of Rs 1,000 crore with a green-shoe option of Rs 6,000 crore has been fully subscribed at 6.99%.
"The company received bids worth Rs 20,830 crore, which is the highest in the yield based bond market in the history of BSE. The company has decided to accept the entire issue of Rs 7,000 crore," the spokesperson said in a statement.
The civil aviation ministry also tweeted the statement. Last week, PTI reported that AIAHL would come out with its bonds issue worth Rs 7,000 crore on September 16.
State Bank of India (SBI) and group entities put in bids worth nearly Rs 3,000 crore. The bids of ICICI Securities and Axis Bank were more than Rs 1,000 crore each, a senior airline official said.
As many as 119 bids were received for the offer. At 6.99%, there is estimated to be a benefit of 150 to 200 basis points in terms of fund raising costs for AIAHL, the official said.
AIAHL Director and Air India's Director (Finance) Vinod Hejmadi said the issue was oversubscribed by 20.83 times despite the volatile market conditions today.