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PFC to open Rs 5,000 crore bond issue for individual buyers on January 15

At least 75 per cent of the proceeds would go towards onward lending and financing/refinancing of existing debt.

PFC to open Rs 5,000 crore bond issue for individual buyers on January 15

PFC had previously sold tax-free infrastructure bonds to retail investors and this would be its maiden taxable issuance to individual buyers. (Photo: iStock)

Power Finance Corporation Ltd (PFC), the nation’s biggest lender to the power sector, on Thursday announced the launch of its maiden taxable bond issue of Rs 5,000 crore for individual buyers that will open on January 15. This first tranche is set to close on January 29.

PFC is planning to raise Rs 10,000 crore through bonds (NCDs) in two tranches.

Addressing the media at the launch of the bond issue, PFC Chairman and Managing Director R S Dhillon said the company is bringing the issue on diversification basis and it would like to do it again going forward.

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About raising the entire Rs 10,000 crore during this fiscal only, Dhillon said it would be done based on response to the issue of the first tranche.

PFC had previously sold tax-free infrastructure bonds to retail investors and this would be its maiden taxable issuance to individual buyers.

Dhillon also said the company has raised Rs 67,000 crore during this fiscal against the overall borrowing plan of Rs 1.18 lakh crore for 2020-21.

These bonds would be listed on BSE. In case of oversubscription of the issue, the bonds would be allotted proportionately.

The proceeds of the issue would be used for “onward lending, financing / refinancing the existing indebtedness of the company, debt servicing (payment of interest and/or repayment/prepayment of interest and principal of existing borrowings of the company), and general corporate purposes,” PFC had said earlier.

At least 75 per cent of the proceeds would go towards onward lending and financing/refinancing of existing debt.

Secured redeemable non-convertible debentures (NCDs) of face value Rs 1,000 will be available for subscription in lots of 10 NCDs.

The issue is open for four categories of investors institutional, non-institutional, high net worth individuals, and retail individual investors.

It however is not open to minors without a guardian name, foreign nationals, persons resident outside India, foreign institutional investors, foreign portfolio investors, NRIs, qualified foreign investors, overseas corporate bodies, and foreign venture capital funds.

The bonds are being offered in four tenors – 3 years, 5 years, 10 years and 15 years. The interest rate for institutional and non-institutional investors will be 4.65 per cent, 5.65 per cent, and 6.78-6.95 per cent, respectively for bonds of 3, 5, and 15-year tenure.

The 10-year bond for these set of investors will fetch 6.53 to 6.80 per cent interest. The interest for high net worth individuals and retail individual investors would be 4.80 per cent, 5.80 per cent, and 6.97-7.15 per cent for bonds of 3, 5, and 15-year tenure. The 10-year bonds for this set of investors will fetch 6.78 to 7 per cent interest.

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