PFC plans to raise nearly Rs 16,800 cr

Power Finance Corp is hoping to raise nearly Rs 16,800 crore in the coming months through issue of securities, including tax-free bonds.

The state-run lender for the power sector has already started the sale process for tax-saving infrastructure bonds and tax-free bonds, which together could raise up to Rs 11,900 crore.

Further, PFC has received regulatory approval for $1 billion (about Rs 4,900 crore) Medium Term Note (MTN) programme that would tap international bond market.

All these issues could mop up as much as Rs 16,800 crore.

“We have started the process of issue of long-term infrastructure bonds, through which we can raise up to Rs 6,900 crore.

“It began on September 29. The first tranche is for Rs 200 crore,” PFC Director (Finance) Mr R Nagarajan told PTI.

There would be both 10-year term bonds carrying an interest rate of 8.50 per cent as well as 15-year term bonds having an interest rate of 8.75 per cent.

According to Mr Nagarajan, PFC issue is expected to see better response, since at present there is no other public issue in the market.

ICICI Securities and SBI Capital Markets are lead arrangers for the issue.

PFC has also started the issue of tax-free bonds on September 29, that could raise a maximum of Rs 5,000 crore.

In addition, the company has received the green signal from the Reserve Bank of India for $1 billion (about Rs 4,500 crore) MTN programme.

“Depending on market conditions, we expect to start this programme in November or December,” Mr Nagarajan said.

The RBS and Bank of America have been appointed as managers of the issue.

Last month, PFC saw good response for its Rs 2,000 crore domestic issue of long-term bonds.

PFC expects to raise around Rs 30,000 crore in the current fiscal and is estimated to have raised nearly half of that amount.

Among others, PFC offers project term loans, equipment lease financing and short term loans for power projects.