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JSW Group is preparing to raise about INR 70,000 crore (around USD 790 million) by issuing zero-coupon bonds through its holding company JTPM Metal Traders. The funds will mainly support JSW Paints' acquisition of up to a 75% stake in Akzo Nobel India, recently cleared by the Competition Commission of India. The bonds will mature in four years and seven months, carry an 8.50% yield, and include put and call options after three years. The issue is rated AA by Crisil and Care Ratings, with anchor investors expected to contribute close to INR 21,000 crore.
JSW Group has decided to raise funds worth about INR 70,000 crore (nearly USD 790 million) through the issue of zero-coupon bonds to be placed by JTPM Metal Traders, its holding company. The bond issuance is planned before the end of September and is aimed at financing a key acquisition. Advertisement
The upcoming bonds are structured with a maturity period of four years and seven months. They will provide investors with an effective yield of 8.50% and are designed with put and call options that can be exercised after three years. According to merchant bankers involved, bidding for these bonds will start at the beginning of the week.
The proceeds are expected to fund JSW Paints' acquisition of up to a 75% stake in Akzo Nobel India, the local unit of the Dutch multinational Akzo Nobel. This transaction was recently approved by the Competition Commission of India, allowing JSW to move ahead with the acquisition. Sources added that the funds may also be partly used for capital infusion into JSW's other operating companies or for refinancing group debt, as noted by Crisil.
The bonds are rated AA by both Crisil and Care Ratings, indicating a strong capacity to meet financial commitments. Market participants noted that about INR 21,000 crore will be taken up by anchor investors, including eight major mutual funds and other institutional entities. The rest of the issue is expected to attract additional demand, reflecting the continued appetite for corporate bonds in India's capital markets.
This financing step follows JSW Paints' agreement earlier this year to acquire nearly 74.76% of Akzo Nobel India for about INR 8,986 crore. Once completed, the deal will strengthen JSW Paints' presence in India's decorative paints industry, positioning it alongside leading companies such as Asian Paints, Berger Paints, and Kansai Nerolac. The acquisition is regarded as a significant move for JSW, considering Akzo Nobel India's established brand and market presence.
Indian companies have increasingly turned to the bond market for large funding requirements in recent years, with strong interest coming from mutual funds and institutional investors. This trend has provided firms with an alternative to traditional bank loans while diversifying sources of capital.
Source Reuters
5th Jun, 2025
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