State owned gas utility company, GAIL India has drawn up a capital expenditure plan of about Rs 3,800 crore in FY 2009-10. The company will utilise the money for laying new gas transportation pipelines. GAIL
GAIL may raise Rs 500 crore through a bonds issue with a greenshoe option of Rs 200 crore. Further, the company will raise Rs 700 crore through Oil Industry Development Bonds (OIDB), whereas the remaining funds it plans to borrow from banks through term loans.
The borrowing of funds will take place in November-December. In a time frame of 3 years company plans to borrow Rs 6000 crore. Being almost zero debt company, the company’s debt-equity ratio may rise to 1:1 in the coming three years.
Dalal Street Journal analysts in a research note said GAIL will benefit from recent Budget Proposals for the Gas sector.