PFC to Open Rs 5,000 Cr Public Issue of Debentures at Coupon Rates Upto 7.15% on Jan 15

State-owned power sector lender Power Finance Corporation Ltd (PFC) will be opening its Rs 5,000 crore public issue of secured, redeemable Non-Convertible Debentures (NCDs) with coupon rates ranging upto 7.15 per cent pa across maturities on January 15, 2021.

January 14, 2021. By Manu Tayal

State-owned power sector lender Power Finance Corporation Ltd (PFC) will be opening its Rs 5,000 crore public issue of secured, redeemable Non-Convertible Debentures (NCDs) with coupon rates ranging upto 7.15 per cent pa across maturities on January 15, 2021.

The NCDs will be allotted on first-come, first-serve basis, and will be only in dematerialized form.

Also, the first public issue of NCD will be offering an option of applying through UPI Mechanism to retail individual investors for upto Rs 2,00,000.

Also, the base issue size has been Rs 500 crore with an option to retain oversubscription of up to Rs 4,500 crore aggregating up to 5,000 crore which is within the shelf limit of Rs 10,000 crore.

Further, these NCDs will be having a face value of Rs 1,000 each, and the tranche-I issue has been scheduled to close on January 29, 2021 with an option of early closure or extension as decided by PFC’s Board of Directors or a duly constituted committee thereof.

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 pa to 4.80 per cent pa, while the 5 year tenure NCD in Series II will offer fixed coupon rate of 5.65 per cent pa to 5.80 per cent pa 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 pa to 7 per cent pa.

On the other hand, the floating coupon rate has been 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 p.a.

The minimum application size is for 10 NCDs aggregating to Rs 10,000 collectively across all series of NCDs and in multiples of 1 NCD of face value of Rs 1,000 each thereafter.

Meanwhile, the NCDs proposed to be issued 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.

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