The transaction (Series B) is an innovative one with only 25 per cent of the face value of Rs 500,000 payable on application with the remainder on "call" after six months. In case the "call" is extended by another six months, investors will get a commitment fee of 0.50 per cent of the unpaid amount.

Nirma's three-year paper has been rated LAAA by Icra with the Industrial Finance Corporation of India as trustees. Proceeds from the bond issue will go towards Nirma Ltd's working capital expenditure.

"The deal's structuring was designed to match the cashflow requirements of the company", said ABN Amro Securities (India) Pvt Ltd managing director Vishnu Deuskar.

Debt market analysts said, "Nirma offering primary size was Rs 50 crore. Nirma was persuaded by the overwhelming investor demand to retainsubscription up to the balance rated amount." Investor profile of the bond issue is spread among banks and mutual funds. Nirma has been assigned an LAAA rating by Icra for a total issuance of Rs 200 crore to be raised in one or more tranches. At end March '98, Nirma registered a net profit of Rs 144.70 crore, up from the Rs 106.32 crore in the preceding fiscal, on sales of Rs 1,205.80 crore (Rs 908.91 crore).

In a bid to reduce its dependence on critical raw materials and reduce final product costs, Nirma is currently implementing projects to manufacture 4,20,000 tonnes per annum (tpa) of soda ash and 65,000 tpa of N-parrafin in the Bhavnagar and Baroda districts respectively in Gujarat. Akzo Nobel Engineering BV of the Netherlands is the technology supplier for the Bhavnagar project and is expected to be completed by end 1990. Revised estimates for the Bhavnagar project is put at Rs 863.97 crore, down from the Rs 1,037.28 crore earlier. The project cost to secure backward integration with the production of65,000 tpa of N-parrafin at the Alindra Detergent Complex in Baroda is estimated at Rs 280 crore and is based on technology provided by UOP Inter Americana Inc of the United States.

The total project cost (based on a broad break-up) is Rs 1,143.97 crore and is proposed to be financed as follows: Rs 227.83 crore via a rights issue (through in 1996-97), Rs 516.14 crore from internal accruals and Rs 400 crore via NCDs of which Rs 80.25 crore (Series A) were mobilised in May this year.