Power Finance Corporation (PFC) plans to raise up to Rs 10,000 crore in two tranches via secured, redeemable and non-convertible debentures (NCDs) to finance its general corporate and loan operations. The first tranche of NCD of Rs 5,000 crore will be open for subscription on January 15 and will close on January 29.
The number of the first tranche will have a base size of Rs 500 crore with a greenhoe option to keep oversubscriptions of up to Rs 4500 crore. The bonds will have terms of 3, 5, 10 and 15 years with coupon rates varying between 4.65% per annum for three-year bonds and 7.15% for 15-year bonds.
RS Dhillion, president of the PFC, told reporters on a virtual conference call that the NCDs offered by PFC would offer an alternative to retail investors with better returns and a varied mandate.
“The offering is distinguished by a coupon rate of 7.15%, which is quite unique in the current market paradigm for retail investors and high net worth individuals (HNIs). The coupon for them was kept higher than that of the institutional investor by up to 20 basis points. In addition, 80% of the issue was reserved for retail investors and HNI, or 40% each, ”said Dhillon.
According to the Tranche I prospectus, the company can use up to 25% of the proceeds for social purposes, while the remainder will be used for subsequent loans, financing, refinancing of existing debt or debt servicing. (payment of interest and / or early repayment of interest and principal of the company’s existing loans).
The minimum application size is 10 NCDs totaling Rs 10,000 collectively in all series and in multiples of an NCD with a face value of Rs 1,000 each thereafter, the company said.
NTMs rated “AAA” by Crisil and the ICRA will be listed on the ESB.
Trust Investment Advisors, AK Capital Services, Edelweiss Financial Services and JM Financial are the main managers on the issue.