Power Finance Corporation (PFC) is preparing to raise up to Rs 10,000 crore in two tranches through secured, redeemable, non-convertible debentures (NCDs) to fund its basic corporate and lending operations. The initially tranche of Rs 5,000-crore NCDs will open for subscription on January 15 and close on January 29.
The tranche a single problem will have a base size of Rs 500 crore with a greenshoe solution to retain oversubscriptions of up to Rs 4500 crore. Bonds will have a tenure of 3, 5, 10 and 15 years with coupon prices ranging among 4.65% per annum for 3-year bond and 7.15% for 15-year bond.
RS Dhillion, chairman of PFC, told reporters in a virtual conference get in touch with that NCDs becoming presented by PFC will provide an option for retail investors with superior 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,” mentioned Dhillon.
According to the tranche I prospectus, the organization can use up to 25% of the proceeds for the corporate objective, though the remainder will be made use of for onward lending, financing, refinancing the current indebtedness or debt servicing (payment of interest and/or repayment prepayment of interest and principal of current borrowings of the organization).
The minimum application size is 10 NCDs aggregating Rs 10,000 collectively across all series and in multiples of a single NCD of face worth of Rs 1,000 every single thereafter, the organization mentioned.
NCDs that are rated ‘AAA’ by Crisil and ICRA will be listed on the BSE.
Trust Investment Advisors, AK Capital Services, Edelweiss Financial Services and JM Financial are the lead managers to the problem.