Power Finance Corporation Limited, is one of the leading financial institutions in India, focused on the power sector will open its Rs 5,000 crore public issue of secured, redeemable Non-Convertible Debentures on January 15, 2021. The NCDs are of face value of Rs 1,000 each. The Tranche I Issue is scheduled to close on January 29, 2021 with an option of early closure or extension.
It will be the first public issue of NCD to offer option of applying through UPI Mechanism to retail individual investors for an application amount of up to Rs. 200,000.
The Tranche I Issue offers options for tenures of 3, 5, 10 and 15 years. The 3-year tenure NCD in Series I will offer a fixed coupon rate of 4.65 per cent per annum to 4.80 per cent per annum, while the 5 year tenure NCD in Series II will offer fixed coupon rate of 5.65 per cent per annum to 5.80 per cent per annum depending on the category of investors.
The 10-year tenure NCDs offers options of both fixed and floating rates of interest. The fixed coupon rate is 6.63 per cent per annum to 7.00 per cent per annum.The floating coupon rate, on the other hand, is based on Benchmark FIMMDA 10Yr G-Sec (Annualised) + spread of 55 basis points to 80 basis points, subject to floor and cap rate depending on the category of investors. The 15-year tenure NCD offers a range of fixed coupon rates with maximum coupon rate of 7.15 per cent per annum. The category IV caters to retail investors with aggregate investment up to Rs 10 lakh.
The minimum application size is for 10 NCDs aggregating to Rs. 10,000 collectively across all series of NCDs and in multiples of One (1) NCD of face value of Rs. 1000 each thereafter.
The NCDs proposed to be issued under the Issue have been rated ‘CARE AAA; Stable’ by CARE Ratings Ltd, ‘CRISIL AAA / Stable’ by CRISIL Ltd (“CRISIL”); and ‘[ICRA]AAA(Stable)’ by ICRA Ltd. NCDs with these ratings are considered to have the highest degree of safety regarding timely servicing of financial obligations and such instruments carry lowest credit risk.
The NCDs offered are proposed to be listed on BSE Limited. The base Issue size is Rs. 500 crore with an option to retain over subscription of up to Rs. 4,500 crore aggregating up to 5,000 crore which is within the shelf limit of Rs 10,000 crore.
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