Greenko: Greenko, Muthoot Finance raise $1.2-billion debt overseas

Renewable energy firm Greenko Energy Holdings raised around $1 billion from investors, while Muthoot Finance raised $250 million. Greenko’s bond was priced at 7.25%, tighter than the initial 7.62% target. The bond, issued under a dual Reg S and Reg S 144A structure, is backed by Greenko Wind Projects (Mauritius) and drew over $3 billion in investor interest. However, the company opted to retain $1 billion, according to two sources.

The 3.5-year senior secured bond’s proceeds will refinance Greenko’s existing $750 million USD bond due in April and support rupee-denominated lending via Pinnspuram SPSP Company. The remaining funds will go toward repaying outstanding debt and general corporate purposes. A Greenko spokesperson declined to comment.

Greenko, which operates 7.5 GW of renewable capacity and is developing 10 GW of pumped storage projects across six states, is also in talks with private credit funds to raise $850 million for a buyout of Orix’s stake in the company. BlackRock and Nomura are among the global financiers being tapped to fund the $850-million fundraising by Greenko’s promoters, Anil Chalamalasetty and Mahesh Kolli, to buy out Japanese investor Orix’s stake in the company, as reported on March 7.

The fundraise is likely to close next week. Earlier this year, Orix signed a share transfer agreement in January to sell its entire stake in Greenko to AM Green Power B.V, a unit of AM Green B.V, founded by Greenko’s promoters. This two-year facility will be backed by shares held by the founders along with their personal guarantees.

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Separately, Muthoot Finance raised $250 million via a tap issuance of its 6.375% 2029 bond, priced at 99.125 to yield 6.651%. The non-banking financial company (NBFC) initiated the Reg S tap of its $400 million bond on renewed investor interest following a credit rating upgrade. Proceeds will be used to expand its lending operation.Global investors are flocking to Indian debt as higher yields make the country’s bonds more attractive. Recent issuances are offering yields between 6.65% and 7.25%, a premium of 250-330 basis points over the US 5-year treasury, which stands at 3.97%.India’s benchmark 10-year government security (Gsec) is trading around 6.65%, maintaining a spread of about 240 basis points over US 10-year treasuries of 4.24%. Investors are coming to Indian credit on expectations of stable macroeconomic conditions, policy support and widening differential.

Greenko’s bond sale was arranged by global banks including Barclays, BNP Paribas, Credit Agricole CIB, DBS Bank, Deutsche Bank, HSBC, J.P. Morgan, MUFG, SMBC Nikko, and Standard Chartered Bank. While Deutsche Bank and Standard Chartered Bank were bankers for Muthoot Finance on the deal.

With liquidity challenges persisting in domestic markets, Indian firms, especially NBFCs, are increasingly looking to external commercial borrowings (ECBs) and dollar bonds to diversify funding sources.