India's largest cement manufacturer, UltraTech Cement, is preparing to launch its biggest-ever rupee bond fundraising as it looks to tap the domestic debt market ahead of the Reserve Bank of India's upcoming monetary policy announcement.

According to banking sources, the company is in discussions with merchant bankers and arrangers to raise ₹50 billion through multiple bond issuances. The fundraising would mark the company's largest rupee-denominated debt offering to date.

Three Bond Tranches Planned

The proposed fundraising will be split into three separate maturities:

• ₹15 billion through 2.5-year bonds
• ₹15 billion through 3.5-year bonds
• ₹20 billion through 5-year bonds

Bankers familiar with the discussions said the company is targeting annual coupon rates of:

• 7.22% for the 2.5-year bonds
• 7.23% for the 3.5-year bonds
• 7.25% for the 5-year bonds

The offering is expected to be completed before the RBI's monetary policy decision scheduled for August 5.

Timing Linked to RBI Policy Outlook

Market participants believe UltraTech is seeking to lock in borrowing costs before the central bank announces its latest interest rate decision.

Issuing bonds ahead of the policy meeting could help the company benefit from current market conditions and avoid potential volatility depending on the RBI's guidance.

AAA Rating Expected to Boost Demand

The proposed bonds have received a AAA credit rating from Crisil, making them among the safest corporate debt instruments in India's bond market.

Bankers expect the issue to attract strong participation from:

• Mutual funds
• Insurance companies
• Pension funds
• Other institutional investors seeking high-quality fixed-income investments

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Previous Bond Fundraising

UltraTech last accessed the bond market in March 2025, raising:

• ₹10 billion through three-year bonds
• ₹10 billion through five-year bonds

Those bonds carried annual coupon rates of 7.34%, slightly higher than the rates being targeted in the latest fundraising.

The company currently has approximately ₹35 billion in outstanding bonds, including ₹5 billion set to mature within the next month.

Strong Financial Performance Supports Expansion

Earlier this month, UltraTech Cement reported a nearly 17% increase in first-quarter profit, supported by its large production capacity and operational efficiency.

The company managed to absorb higher fuel and energy costs linked to geopolitical tensions in the Middle East more effectively than many smaller competitors, reinforcing its position as India's leading cement producer.

The planned bond issue is expected to provide additional financial flexibility as UltraTech continues investing in capacity expansion while managing refinancing requirements.