NTPC to open public issue of tax free bonds on December 3

Updated: Tuesday, May 9, 2017, 12:23 [IST]

National Thermal Power Corporation (NTPC), the largest power producer in the country, shall hit the market with its public issue of tax-free secured redeemable non-convertible bonds in over two decades tomorrow i.e. December 3. The base size of the public issue is Rs.1000 crore with an option to retain over-subscription upto Rs.750 crore. The public issue is scheduled to remain open until December 16.

The lead managers for the public issue include A K Capital Services, Axis Capital, ICICI Securities, Kotak Mahindra Capital Company and SBI Capital Markets .

The funds mopped up via the offer shall be used for financing capital expenditure. Additionally, the funds shall be used for refinancing in order to meet the debt required in company's ongoing projects.

Minimum application size: Available for a face value of Rs. 1000/bond, the minimum application size for subscription by retail investors is 5 bonds i.e. Rs. 5000 with a maximum of Rs. 10 lakh.

Issue allocation: The public issue of tax-free bonds by NTPC shall be allocated in the ratio of 40%, 25%, 25%, 10% for residential retail investor category, HNIs, corporates and QIBs respectively.

Coupon rate : Retail investors are entitled to a coupon rate of 8.66%, 8.73% and 8.91% for 10, 15 and 20 years maturity term. While non-retail investor category, including HNIs, QIBs etc. will be entitled to a 0.25% lower coupon rate in comparison to retail investors.

Taxation: Interest income earned from these bonds is tax free and would not be added to the total income for computation of tax. Interest will be paid annually on these bonds.

Ratings : These bonds have been rated CRISIL AAA by CRISIL and ICRA AAA (Stable) by ICRA Limited. Instruments with this rating are considered to have the highest degree of safety with respect to timely servicing of financial obligations and bear lowest credit risk.

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