Mumbai: Larsen - Toubro, India’s biggest engineering company, raised Rs 6,400 crore in bond sales this week and is poised to raise a similar amount in the next few weeks, seeking to double its cash position to Rs 25,000 crore at a time when it has hundreds of crores of bills coming up for payment in an uncertain environment for receipts. The plan is to raise money in different tranches and tenures from the corporate bond market so as to match the company's liabilities at a future date just in case cash flows do not recover quickly enough, three top industry executives told ET. "The company had cash of about Rs 12,000 crore before this crisis.

We plan to increase it to Rs 25,000 crore.

This is to ensure that the business runs smoothly in a difficult environment.

It is just being prudent because we still do not know the full impact the virus will have on growth, liquidity or business," said one of the three persons cited above. L-T did not comment. The company plans to increase the cash in hand to Rs 25,000 crore for about a year.

A part of this money has already been raised in different tenures from the bond market.

The tenures range from one year to 10 years, with yields ranging from 6.60% to 8%.

"The average interest rate L-T has paid comes to about 7.45% on all these bonds which is slightly on the higher side if you look at the low returns it will generate, but this cost is necessary at a time like this," said the second person quoted above. On Wednesday alone, the company raised Rs 5,150 crore by selling bonds to banks, mutual funds, insurance companies and provident funds. Axis Bank, SBI Capital Markets, Citibank, Barclays and HSBC are helping the company raise these funds.

Individual banks could not be contacted immediately. "Companies prefer to stay in cash because their toplines are under threat in this environment.

L-T has a treasury as big as a bank and raised money in different tenures to match payment liabilities," said the first person cited above. Liquidity measures, such as the targeted long term repo operations (TLTRO), have also helped companies like L-T. “Large companies aim to remain in cash at this time because of the global standstill,” said Ajay Manglunia, managing director - head of fixed income at JM Financial. Rating company CRISIL graded L-T as triple-A, the top notch for its various NCD issues. “CRISIL's ratings continue to reflect L-T's dominant position in the engineering and construction market in India, a diversified revenue profile, adequate financial risk profile, and strong financial flexibility,” it said in a note on Tuesday.