Power Finance Corporation Limited will open its Rs 5,000 crores public issue of secured, redeemable Non-Convertible Debentures on January 15, 2021. The base Issue size is Rs. 500 crores with an option to retain oversubscription of up to Rs 4,500 crores aggregating up to 5,000 crores which are within the shelf limit of Rs 10,000 crores. The NCDs are of the face value of Rs 1,000 each. The Tranche I Issue is scheduled to close on January 29, 2021, with an option of early closure or extension as decided by PFC’s Board of Directors.
- Debentures of Power Finance Corporation offers coupon rates ranging up to 7.15% p.a
- Rs. 500 crores base Issue size; option to retain oversubscription up to Rs. 4,500 crores aggregating up to Rs. 5000 crores
- Allotment on a first-come, first-served basis
- NCDs only in dematerialized form
- First public issue of NCD to offer the option of applying through UPI Mechanism to retail individual investors for an application amount of up to Rs. 200,000/-
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% p.a to 4.80% p.a., while the 5-year tenure NCD in Series II will offer fixed coupon rate of 5.65% p.a. to 5.80% p.a. 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% p.a. to 7.00% p.a. The floating coupon rate, on the other hand, is 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 a maximum coupon rate of 7.15% 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 One (1) NCD of the face value of Rs. 1000 each thereafter.
The NCDs offered through the Shelf Prospectus and the Tranche I Prospectus both dated January 11, 2021, are proposed to be listed on BSE Limited. The Lead Managers to the Issue are Trust Investment Advisors Private Limited, A. K. Capital Services Limited, Edelweiss Financial Services Limited and JM Financial Limited. The NCDs proposed to be issued under the Issue 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.