Vedanta Resources leads India surge in dollar loans for local buyouts

Vedanta raised a $1.75 billion facility in August to finance a plan to take its Indian unit private, and is in talks with banks for a further $600 million

Massive borrowing by Vedanta Resources Ltd. has helped push up Indian firms’ dollar loans to fund the privatization of companies and acquisitions to the most in six quarters.

Vedanta, the London-based commodity conglomerate controlled by billionaire Anil Agarwal, raised a $1.75 billion facility in August to finance a plan to take its Indian unit private, and is in talks with banks for a further $600 million. As a result, Indian borrowers are set to get at least $2.6 billion of dollar event-driven loans this quarter, making this the most active since the first three months of 2019, according to Bloomberg-compiled data.

A surge in global liquidity following cash infusions from global policy makers to check the pandemic’s economic fallout is bolstering demand among international lenders for facilities from markets including China, India and Indonesia. India’s $277 billion pandemic stimulus is also benefiting the corporate sector, and the nation’s borrowers seeking dollars have seen loan rates drop from four-year highs in the June quarter.

Other borrowers seeking dollar event-driven loans this quarter include Baring Private Equity Asia, which began marketing a $600 million leveraged buyout loan last month to back the delisting of unit Hexaware Technologies Ltd. and repay dollar bonds. KKR & Co., meanwhile, launched a $206 million borrowing to syndication to finance the purchase of a controlling stake in J.B. Chemicals & Pharmaceuticals Ltd.

Vedanta’s 9.25% dollar bonds due 2026 rose 0.7 cents on the dollar to 79.2 cents as of 3p.m. in Hong Kong, according to Bloomberg-compiled prices. That is the biggest jump for the notes in two weeks.