INSUBCONTINENT EXCLUSIVE:
MUMBAI: Aditya Birla Group flagship Hindalco Industries will seek shareholders' approval for the issue of non-convertible debentures (NCDs)
on private placement basis for aggregating Rs 6,000 crore at its forthcoming annual general meeting (AGM) next week.
The company seeks
shareholders' approval for raising around Rs 6,000 crore through NCDs on private placement basis in order to augment resources for the
ongoing capital expenditure, repayment of existing loans, and for general corporate purposes, according to the company's annual report.
"To
further bolster the balance sheet, the company has prepaid close to Rs 8,000 crore of long-term project loans in India
This has led to a significant improvement in the consolidated net debt to EBITDA at below 3x at the end of March 2018," Hindalco chairman
Kumar Mangalam Birla said in shareholders' note.
The current net debt stands at Rs 15,000 crore.
Birla pointed out that the ongoing
government initiatives such as the creation of 100+ smart cities, thrust on infrastructure, especially rural infra development, along with
'Make in India' and 'Digital India' will continue to support the demand for aluminium and copper.
He noted that although India's GDP growth
slowed from 7.1 per cent in FY17 to 6.7 per cent in FY18, the economy recorded a seven-quarter-high GDP growth of 7.7 per cent in the exit
quarter of FY18.
"This reflects momentum
Investors seem to be positive on India's economic prospects
The foreign direct investment (FDI) flows continue to be encouraging," he said.
The prevailing sense of optimism accentuates India's
continuing economic growth in the future as well.
It is attributable to the country's solid fundamentals, such as deleveraging by
corporates, resulting in much stronger balance sheets, better capacity utilisation with consumption demand becoming stronger and insolvency
and bankruptcy process weeding out non-performing assets, among others.
Birla, however, warned that the near-term challenges, including
concerns like rising oil prices, hardening inflation, firming bond yields and widening current account deficit, cannot be ignored.
He also
pointed out the ongoing global trade frictions, particularly between the US and China, are worrisome and can have a spillover negative
effect on countries like India.
"The terrain ahead could be a tad bumpy depending on the economic and geopolitical environment," Birla added
