Power Finance Corporation announced on Wednesday that it aims to raise funds of up to Rs 5,000 crore through a public offering of non-convertible debentures (NCDs) starting from July 21. The issue is scheduled to close on July 28.
The NCDs are divided into three maturity options of three years, 10 years, and 15 years. The base issue size is set at Rs 500 crore, and there is a green shoe option that allows for an additional Rs 4,500 crore, bringing the total fundraising to Rs 5,000 crore, which is well within the permissible shelf limit of Rs 10,000 crore, the company said in a release.
The 10% of the allocation is reserved for institutional investors, with an equal 10% allotted to non-institutional investors. The share designated for High Net worth Individuals (HNIs) stands at 40%, mirroring the same proportion allocated for retail investors, also set at 40%.
The effective yield offered to NCD holders varies based on different categories and ranges from 7.44 per cent to 7.54 per cent per annum.
The NCDs have been given the highest credit rating of ‘AAA’ with a ‘Stable’ outlook by CARE ratings, ICRA, and CRISIL.
“Our loan book as of now has generation, transmission, and distribution areas. Under generation out of the total, 12 per cent is toward renewable, the balance is through thermal (41 percent),” said Parminder Chopra who is holding the additional charge as chairman and managing director of PFC. “PFC has funded 37 per cent (of total loan book) toward distribution, and 7 per cent toward transmission.”
As of March 31, the overall outstanding debt of the company stood at Rs 3.63 lakh crore. Out of this, Rs 2.08 trillion was raised via domestic bonds, while Rs 64,554 crore was obtained through foreign currency bonds.
The book running lead managers of the issues are JM Financial Limited, A.K. Capital Services Limited, Nuvama Wealth Management Limited, SMC Capitals Limited, and Trust Investment Advisors Private Limited. The NCDs will be listed on the Bombay Stock Exchange (BSE).
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