India's Dmart owner eyes debt market comeback after 7-year hiatus, bankers say

MUMBAI: India’s Avenue Supermarts is set to tap the corporate debt market for the first time in seven years, as it aims to raise funds through shorter duration up to three years bonds, two merchant bankers said on Wednesday.

The owner of the retail brand Dmart is looking to raise around 10 billion rupees ($104.81 million) and has alerted merchant bankers to work on the issue, the bankers said requesting anonymity as they are not authorised to speak to media.

“The company will not prefer anything above three-year papers, and a couple of private banks are active on this deal,” one of the bankers quoted above said.

The company did not reply to a Reuters email seeking comment.

Bankers added the deal should go through in the first half of September, with mutual funds keen to invest in the rarely-issued securities.

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The company last raised funds through sale of bonds in October 2019, which carried a 13-month maturity, but had redeemed them within six months.

Avenue Supermarts’ bonds have been assigned AAA rating by ICRA on August 25, with the rating agency considering its strong market position as the largest organised food and grocery retailer, operating retail stores under an established brand name.

“The ratings favourably factor in the company’s large supply chain network, strong procurement abilities and competitive pricing, which resulted in healthy footfall and steady gross margins,” analysts at ICRA said in a note.