Power Finance Corporation on July 19 said it plans to raise upto Rs 5,000 crore through public issue of non-convertible debentures that will open for subscription on July 21.
The base issue size is Rs 500 crore with a green shoe option of up to Rs 4,500 crore, aggregating up to Rs 5,000 crore, which is within the shelf limit of Rs 10,000 crore, the company said in a release.
The issue will close for subscription of July 28.
PFC will use 75 percent of proceeds for the purpose of onward lending, financing / refinancing the existing indebtedness of the company, and /or debt servicing, and remaining 25 percent for general corporate purposes.
The public issue of NCDs have maturity options of three years, 10-year, and 15-year with annual coupon payment being offered across series I, II, and III, respectively. Effective yield for NCD holders in various categories ranges from 7.44 percent to 7.54 percent per annum.
The spread between the three year and 15-year coupon is just five basis points (Bps). Parminder Chopra, who hold the additional charge of CMD of PFC, told Moneycontrol that it is because of stability in yields in the money markets.
The bonds have been rated ‘AAA’ with ‘Stable’ outlook by CARE ratings, ICRA, and CRISIL. The bonds will be listed on the BSE, company said in a release.
JM Financial Limited, A.K.Capital Services Limited, Nuvama Wealth Management Limited, SMC Capitals Limited, and Trust Investment Advisors Private Limited are the lead managers to the Issue.
According to the company’s presentation, the total outstanding borrowings as on March 31, were Rs 3.63 lakh crore. Of the total amount Rs 2.08 lakh crore is borrowing through domestic bonds, and Rs 64,554 crore is through foreign currency bonds.
Domestic and foreign currency bonds constitute 75 percent of the total outstanding.
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