State-run Power Finance Corporation's Rs 5,000 crore taxable non-convertible debentures (NCDs) issue was subscribed close to nine times on Monday and closed for subscription 11 days ahead of the schedule, according to the BSE data. Power Finance Corporation (PFC) has planned to raise Rs 10,000 crore through bonds in two tranches.
The first tranche of Rs 5,000 crore, including Rs 4,500 crore green-shoe option, opened for subscription on Friday (January 15) and was scheduled to close on January 29. But the issue had to be closed on Monday, the second day of trading, due to over-subscription on BSE. According to the BSE data, subscribers applied for 4,47,76,348 bonds or NCDs of Rs 1,000 each against 50 lakh bonds on the offer (with 4.5 crore NCDs under green-shoe option) on the offer.
Thus, the PFC received subscription worth Rs 4,477.63 crore against Rs 500 crore base issue size of NCDs on offer (with green-shoe option of Rs 4,500 crore). The overwhelming response to the bond issue is expected to encourage the firm to come out with the second bond issue of Rs 5,000 crore during the current financial year, a source said.
Earlier on Thursday last week, PFC Chairman R S Dhillon had told reporters that the issue would be allotted on first-come-first-serve basis and in case of over-subscription, the allotment would done proportionately. Secured redeemable non-convertible debentures (NCDs) of face value Rs 1,000 are available for subscription in lots of 10 NCDs.
The issue was for four categories of investors institutional, non-institutional, high net worth individuals and retail. Dhillon had also said the company would bring more such bond issues going forward.
About raising the entire Rs 10,000 crore during this fiscal itself, Dhillon had said it would be done based on response to the issue. PFC had previously sold tax-free infrastructure bonds to retail investors. This is its maiden taxable issuance for individual buyers. The bonds were offered in four tenors — 3 years, 5 years, 10 years and 15 years.
For institutional and non-institutional investors, the interest rate for bonds of 3, 5 and 15-year tenors has been kept at 4.65 percent, 5.65 percent and 6.78-6.95 percent, respectively. The 10-year bond for these investors will fetch 6.53-6.80 percent interest.
The interest for high net worth individuals and retail individual investors would be 4.80 percent, 5.80 percent, and 6.97-7.15 percent for bonds of 3, 5 and 15 years. The 10-year bonds for this set of investors will fetch 6.78-7 percent interest.