Power Finance Corporation (PFC), is one of the leading financial institutions in the country, catering to the needs of the power sector, will enter the capital market with a public issue of secured, redeemable Non-Convertible Debentures (NCDs) on Friday, January 21, 2021.
The base issue size is 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. 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.
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The allotment of NCDs will be done on a first-come, first-served basis, and all the NCDs will be issued only in dematerialized form.
The company said in a statement that this is the 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 2 lakh.
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 per annum (p.a.) to 4.80 per cent p.a., while the 5-year tenure NCD in Series II will offer a fixed coupon rate of 5.65 per cent p.a. to 5.80 per cent p.a. depending on the category of investors.
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The 10-year tenure NCDs offer options of both fixed and floating rates of interest. The fixed coupon rate is 6.63 per cent p.a. to 7.00 per cent p.a. The the floating coupon rate, on the other hand, is based on a benchmark of fixed income money market and derivatives association of India (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
the 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 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 are dated January 11, 2021, and are proposed to be listed on BSE. The Lead Managers to the Issue are Trust Investment Advisors, A.K. Capital Services, Edelweiss Financial Services, and JM Financial, PFC said in a statement.
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