Power Finance Corporation (PFC) is planning to raise up to Rs 10,000 crore in two tranches via secured, redeemable, non-convertible debentures (NCDs) to fund its general corporate and lending operations. The first tranche of Rs 5,000-crore NCDs will open for subscription on January 15 and close on January 29.
The tranche one issue will have a base size of Rs 500 crore with a greenshoe option to retain oversubscriptions of up to Rs 4500 crore. Bonds will have a tenure of 3, 5, 10 and 15 years with coupon rates ranging between 4.65% per annum for three-year bond and 7.15% for 15-year bond.
RS Dhillion, chairman of PFC, told reporters in a virtual conference call that NCDs being offered by PFC will provide an alternative for retail investors with better yield and varied tenure.
“The offer stands out for a coupon rate of 7.15%, which is quite unique in the current market paradigm for retail and high net worth individual (HNI) investors. The coupon for them has been kept higher than the institutional investor by up to 20 basis points. Also, 80% of the issue has been earmarked for retail and HNI investors that is 40% each,” said Dhillon.
According to the tranche I prospectus, the company can use up to 25% of the proceeds for the corporate purpose, while the remainder will be used for onward lending, financing, refinancing the existing indebtedness or debt servicing (payment of interest and/or repayment prepayment of interest and principal of existing borrowings of the company).
The minimum application size is 10 NCDs aggregating Rs 10,000 collectively across all series and in multiples of one NCD of face value of Rs 1,000 each thereafter, the company said.
NCDs that are rated ‘AAA’ by Crisil and ICRA will be listed on the BSE.
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