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UltraTech Cement is planning its largest-ever rupee-denominated bond issue as it looks to raise INR 50 billion from the domestic debt market ahead of the Reserve Bank of India's monetary policy announcement scheduled for August 5. The proposed fundraising will be spread across three maturities and is expected to attract institutional investors due to its AAA credit rating. The move comes after the company reported a strong first-quarter performance and continues its strategy of maintaining financial flexibility while supporting business growth and managing its debt obligations.
UltraTech Cement is in discussions with merchant bankers and arrangers to raise INR 50 billion through domestic bonds, which would be the company's largest rupee-denominated debt fundraising to date, according to people familiar with the matter. The company is looking to complete the bond issuance before the Reserve Bank of India's monetary policy decision on August 5.
India's largest cement producer by installed capacity plans to raise the funds through three bond tranches with maturities of two-and-a-half years, three-and-a-half years and five years. According to banking sources, who requested anonymity because the discussions are private, UltraTech intends to raise INR 15 billion each through the two shorter-tenure bonds and INR 20 billion through the five-year bond.
The proposed annual coupon rates are around 7.22% for the two-and-a-half-year bonds, 7.23% for the three-and-a-half-year bonds and 7.25% for the five-year bonds. The bonds have received a AAA rating from Crisil, making them attractive for mutual funds and other institutional investors looking for high-quality debt instruments.
The planned fundraising is significantly larger than UltraTech Cement's previous domestic bond issue. In March 2025, the company had raised INR 10 billion each through three-year and five-year bonds at an annual coupon of 7.34%. The lower coupon rates being targeted in the current issue also indicate a favourable borrowing environment for highly rated issuers.
The company currently has outstanding bonds worth INR 35 billion, including INR 5 billion that is due for repayment within the next month. The proposed bond issue is expected to strengthen its funding position while helping refinance upcoming obligations and support its capital requirements. UltraTech did not respond to Reuters' request for comment outside regular business hours.
The fundraising plan follows a strong start to the financial year for the cement manufacturer. During the past week, UltraTech reported a nearly 17% year-on-year increase in first-quarter profit, supported by higher sales volumes and its ability to manage rising fuel costs better than smaller competitors despite volatility linked to the Middle East conflict. The company has also continued expanding its production capacity, reinforcing its leadership position in the Indian cement industry.
Source Reuters
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