According to a leading financial daily, India's biggest engineering company, Larsen & Toubro confronts the chance of cancellation of one of its biggest road-building contracts worth almost Rs 30 bn as its client, GMR Infrastructure has decided to terminate a National Highways Authority of India (NHAI) toll road project. GMR has pulled out of the NHAI contract citing land acquisition, environmental clearance and toll notification as some of the issues. A senior executive at L&T has said that the firm is watching the situation and pending official confirmation from GMR, the order still remains on the books of L&T. The particular order accounts for 2% of the order book. In the near term, the news does not bode well for L&T given the slowdown in investment cycle, leading to slower growth in the order book.
Power Grid Corporation of India has raised US$ 500 million through ten years dollar denominated bonds at 4.03%. The funds would be used to partly finance its Rs 20,000 crores capital expenditure planned for 2012-13. The bond issue is being led by Standard Chartered, Royal Bank of Scotland and Barclays. Power Grid has raised the bonds at 4.03% about seven basis points lower than the rates at which EXIM Bank raised US$ 750 million at the beginning of the year. The transaction is expected to set a record in the lowest coupon ever paid by an Indian company to raise ten-year dollar bonds and it is expected to get the highest over-subscriptions in this category. Indian companies have raised US$ 10 billion last year through offshore bonds.