MUMBAI, May 1: Two-wheeler major TVS Suzuki will privately place Rs 150 crore in debentures on Friday.

The double A-rated debentures carry a coupon of 15.5 per cent and have a 66-month maturity period, sources here said.

Arrangers to the issue plan to tap high networth individuals and financial institutions like commercial banks and foreign institutional investors to subscribe to the issue. If successfully placed, the issue will set a new benchmark rate for similar maturing corporate bonds. The new rate, 15.5 per cent, has been much lower than the rate at which corporates raised funds earlier.In March, for example, a double A-rated companies raised similar maturing instruments at 16.5-17.0 per cent.

With the domestic interest rates on the decline, corporates, too, have lowered their market borrowing rates. Many companies have now deferred their market borrowing plans to re-work their interest rates.

The domestic interest rates have been declining after the Reserve Bank of India's policy announcement last month, which aims at lowering borrowing costs through induction of liquidity.

The state-owned Steel Authority of India, for example, postponed its private placement of bonds last week and is now planning to tap the market on Monday with a revised coupon. The company has lowered the bond coupon to 14.5 per cent from 14.75 per cent decided earlier.Over Rs 3,000 crore worth of corporate bonds is estimated to be placed privately this month, market players said. Analysts at leading foreign brokerages have been optimistic about TVS-Suzuki's performance for financial year 1997-98 and 1998-99. James Capel B&K has rated the company's stock as an oututperformer.``Double-digit volume growth, cost-cuts through value engineering, improvement of operating margins, pruning of its vendor base and favourable demographics: TVS Suzuki has got it all right,'' Anupam Thareja, analyst at James Capel BK said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.