Rural Electrification Corporation (REC) Limited, a Central Public Sector Enterprise under the Ministry of Power, which finances and promotes rural electrification projects, plans to raise up to Rs 6,000 crore by issuing two bonds, people familiar with the matter said. REC plans to raise up to Rs 4,000 crore through the first bond, which includes Rs 3,300 crore in a greenshoe option. The bond matures in 15 years or on November 30, 2038, said the people cited above.
A greenshoe option is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer, if the demand for a security issue proves higher than expected.
Through the second bond, the company will raise up to Rs 2,000 crore, which includes Rs 1,500 crore in a greenshoe option. This bond matures in 1 year and 11 months or on November 29, 2025, said one of the people quoted above.
Also read: Bank of Baroda raises Rs 5,000 crore via 10-year bonds at 7.68% coupon
Bidding for these bonds will take place on December 8 on the electronic bidding platform of the National Stock Exchange of India (NSE). The bidding for the first bond will be held between 11 AM and 12 PM. And bidding for the second bond will take place between 12 PM and 1 PM.
The pay-in date of the bond is December 12. The pay-in date is the date when exchange of bonds and money takes place between issuers and investors.
The bonds have been rated ‘AAA’ by ICRA and India Ratings.
On November 22, REC floated two bonds of 10-year and two-and-a-half-year maturity, worth Rs Rs 3,000 crore each.
SIDBI, IRFC bond issuances
On November 22, the Small Industries Development Bank of India (SIDBI), and the Indian Railway Finance Corporation (IRFC) will issue bonds.
SIDBI plans to raise up to Rs 5,000 crore, including a Rs 3,000 crore greenshoe option, through bonds maturing in five years or on November 24, 2028. Additionally, IRFC, too, floated bonds worth Rs 3,000 crore, including a Rs 2,500 crore greenshoe, on November 22.
On November 21, Piramal Capital & Housing Finance Ltd raised Rs 600 crore via the issue of two-year bonds.
Apart from this, Shriram Finance and Nirmal Bang Securities Pvt Ltd also raised funds on November 21.
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