In largest-ever loan prepayment, Hindalco to retire debt worth Rs 6,800 cr this year
Hindalco Industries Limited, the metals flagship firm of the Aditya Birla Group and the world largest aluminium rolling company has been flushed with funds after it successfully raised capital from qualified institutional placement (QIP).
Hindalco Industries Limited, the metals flagship firm of the Aditya Birla Group and the world largest aluminium rolling company has been flush with funds after it successfully raised capital from qualified institutional placement (QIP).
The company plans to used that fund to retire part of its debt in the current fiscal to the tune of Rs 6,800 crore, reports The Economic Times.
The loan prepayment will be the largest ever by any corporate to domestic banks in India.
The report said that the company is going to prepay Rs 4,500 crore in April, which includes corporate loan worth Rs 1,000 crore syndicated to a group of seven banks and part prepayment of Rs 3,500 crore Mahan loan to two domestic banks. It also plans to prepay Utkal loan worth Rs 2,300 crore in July this year.
The company's long term debt stood at Rs 58,081 crore as on December 31, 2016 while short-term debt stood at Rs 8,400 crore as of December 31, 2016, as per the unaudited financial statement issued by the company.
The company shifted to more value-added products, improving demand and increase in the aluminium prices have helped it US subsidiary Novelis to turnaround. The prices of aluminium had fallen below the benchmark cost of production of USD 1,500 a tonne due to oversupply about two years back but have recovered currently to USD 1,925 a tonne.
Novelis is also likely to benefit from the demand from automakers, who in order to meet the stringent emission norms and fuel efficiency are switching to lightweight aluminium from steel. Novelis is the world's largest producer of aluminium beverage can sheet and largest recycler of used beverage cans.
Hindalco’s copper business has also started to show improved performance with the increase in copper prices and focussing on high-end products.Many analysts have turned bullish on the metal sector and domestic equity funds have bought shares of Hindalco to the tune of Rs 1,940 crore last month.