Power Grid to raise Rs 1k cr via bond issue

State-owned electricity transmission company Power Grid Corporation of India (PGCIL) is planning a bond issue next week to raise Rs 1,000 crore, said a source privy to the development.

The STRIP (separately traded registered interest and principal) issue, which will be a private placement, will have a tenure of 4-15 years and a coupon rate of 8.70-8.80%.

A strip issue is one with papers of multiple maturities as opposed to a bullet issue which has a single tenure. PGCIL normally goes for strip issues, the source said, adding, it has called a meeting of possible debt arrangers in New Delhi.

PGCIL is also reported to be looking to raise Rs 8,000 crore through a 10% stake sale by the government and a 10% fresh equity infusion by the company. The proceeds are expected to be split equally between the government and the company. The transmission infra firm has planned a capex of Rs 55,000 crore during the Eleventh Five Year Plan (2007-2012). It also plans to spend Rs 1,00,000 crore over the next seven years to double its network to 1,57,000 km.