The Power Finance Corporation, or PFC, recently launched secured redeemable non-convertible debentures. The issue was launched on July 21 and will be closed on July 28. The face value of debentures is ₹1,000 each unit.
The minimum bid quantity is 10 i.e., ₹10,000 either taken individually or collectively across all or any series of NCDs.
The issue size is ₹500 crore. The issue has an option to retain oversubscription up to ₹4,500 crore aggregating up to ₹5,000 crore.
The NCDs proposed to be issued have been rated as AAA stable by CARE Ratings, AAA stable by Crisil and AAA stable by ICRA.
ICICI Bank is the issue’s sponsor bank.
Coupon rate
The rate of interest for NCDs ranges between 7.44 percent to 7.55 percent based on the category of NCD holders and the tenor of the instrument.
For example, the 3-year tenor of NCD will offer a coupon of 7.45% for NCD holders in category 1 and category II, and 7.50% for holders in category III and category IV.
The 10-year tenor of NCD will offer a coupon of 7.47% for NCD holders in category 1 and category 2, and 7.53% for holders in category III and category IV.
The maximum interest, however, will be given to NCDs with 15-year tenor. The NCD holders in category I and category II will be entitled to receive an interest of 7.50 percent on 15-year debentures and holders in category III and IV will be entitled to receive an interest of 7.55 percent for this tenor.
A background
For the unversed, PFC is a central PSU owned by the Ministry of Power. Established in 1986, it is the financial backbone of the power sector in India. It is the eighth highest profit-making Central Public Sector Undertaking (CPSU) as per the Department of Public Enterprises Survey for FY 2017–18.
It is also the largest NBFC in India, and also largest infrastructure finance PSU. Government has raised its status from ‘Navratna’ to ‘Maharatna’ on October 12, 2021.
Initially wholly owned by the Government of India, the company issued an initial public offering in Jan 2007.
