Tax free bonds of NTPC get massive response

GN Bureau | September 24, 2015


#Tax free   #tax   #NTPC   #PFC   #Indian Renewable Energy Development Agency   #IREDA  


NTPC’s public issue of tax-free bonds received a massive response from investors with the subscription amount touching Rs 4,417.58 crore. The total issue size is of Rs 700 crore. The highest subscription came from corporates at eight times the issue size followed by retail individual investors at over six times the size.

NTPC had earlier raised Rs 300 crore through private placement of tax-free bonds. It was allotted a total of Rs 1,000 crore to be raised through tax-free bonds this fiscal year.

The response of the investors is being attributed to the fact that tax-free bonds have made a comeback to the market after a period of one year. “This is due to the fact that tax-free bonds are entering the market after having remained absent in the last fiscal year. Moreover, since this is the first public issue in this fiscal, combined with the fact that interest rates are falling, investors want to lock-in their money at as higher yields as possible. That is why we saw such a huge subscription,” said Ajay Manglunia, executive vice-president-fixed income, Edelweiss Securities.

PFC to offer bonds
Meanwhile, Power Finance Corporation (PFC), another state-owned company has been permitted to issue tax-free bonds worth Rs 1,000 crore and it is set to hit the market with its public issue in the first week of October.

The issue is set to open on October 5, market participants said. PFC had earlier raised Rs 300 crore through private placement of its tax-free bonds at 7.16%, according to bond market sources.

Market participants indicated that the bonds will have coupon rates of 7.36%, 7.52% and 7.60% on its 10, 15 and 20-year issues respectively for retail individual investors while it will carry yields of 7.11%, 7.27% and 7.35% for institutionals, corporates and HNIs.

The PFC will also seek the shareholders' approval for raising up to Rs 60,000 crore through issue of securities. PFC is a one of the leading lenders to the power sector.

The company proposes "... to raise funds up to Rs 60,000 crore through issue of bonds/debentures/notes/debt securities or private placement basis in India and/or outside India,".

The approval for raising funds will be sought from shareholders in the annual general meeting being held today (September 24), the company said in a regulatory filing. PFC, an infrastructure finance company, is engaged in providing financial assistance to state power utilities for meeting the financing and development requirements of the power sector. Government's five per cent stake sale in power sector lender PFC recently was lapped up by investors, fetching about Rs 1,600 crore to the exchequer.

Indian Renewable Energy Development Agency (IREDA), which has been allotted a limit of Rs 2,000 crore, is likely to tap the markets soon. While 70% of the amount has to be raised through public issue of the tax-free bonds, the rest, i.e., Rs 600 crore, could be raised through private placement, according to the government notification.

Comments

 

Other News

Jammu-Kashmir makes indelible mark on electoral history

In a massive stride for India’s electoral polity, Jammu and Kashmir has registered its highest poll participation in the last 35 years in the General Elections of 2024. The Combined Voter Turnout (VTR) at the polling stations for the entire union territory, which has 5 Lok Sabha seats

New study tracks heat wave; exposes dangerous trends in big cities

An unprecedented heat wave has been enveloping Indian cities, worsening the urban heat island effect, this summer. A new analysis by Centre for Science and Environment (CSE) says there are far deeper and longer term evidences on the nature of this changing trend that is impacting the biggest cities of the

Phase 6: Voter turnout 59.06% at 7:45 PM

Polling in the sixth phase of General Elections 2024 which commenced across 58 PCs recorded an approximate voter turnout of 59.06% as of 7:45 pm Saturday. In spite of hot weather in certain parts of the country, voters were undeterred in their enthusiasm as they were seen queuing up patient

Banks not adhering to RBI guidelines, finds study

Banks across India are levying inconsistent service charges on basic savings accounts. A study, “Benchmarking Reasonableness of Service Charges by Banks in India”, uncovers and exposes inconsistencies in adherence to RBI mandates by banks. It finds some banks impose charges exceeding reasonable

“Mumbai Infra boom similar to that of Manhattan in 19th C”

Mumbai’s ongoing infrastructure boom – with a new coastal road, Atal Setu, metro lines and much more – creating transport corridors – is comparable to that of Manhattan in New York during 1811-1870, according to BMC commissioner Bhushan Gagrani. The iconic projects being implemented

Global Gandhi: How the Mahatma captured the world’s imagination

Gandhi’s Australia, Australia’s Gandhi By Thomas Weber Orient BlackSwan, 348 pages, Rs 1,800  

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter