State-run Rural Electrification Corp said it plans to raise Rs 700 crore through public issue of tax-free non-convertible bonds. “REC plans to raise funds through Public Issue of Tax Free Secured Redeemable Non Convertible Bonds with Face Value of Rs 1,000 each for an amount of Rs 300 crore with an option to retain oversubscription of up to Rs 400 crore aggregating up to 700 crore in this tranche,” the company said in a press release. The interest income on bonds is exempt from tax in the hands of the investors, it said. The Issue will open on October 27, and close on November 4, with an option for early closure or extension as may be decided by the Board of Directors or the Bond Committee of the company. The NCDs are proposed to be listed on the BSE.
A K Capital Services Ltd, Edelweiss Financial Services Ltd and R R Investors Capital Services Pvt. Ltd are the Lead Managers. Karvy Computer share Private Limited is the registrar to the Issue while SBI CAP Trustee Company Limited is the Bond Trustee to the Issue. The funds raised through this Issue will only be utilised towards lending operations of the company and other associated business objectives. REC is a public financial institution in the Indian power infrastructure sector. It is engaged in the financing and promotion of transmission, distribution and generation including renewable energy projects throughout India and occupies a key position in the Government’s plan for the growth of the Indian power sector.
REC assists their clients in formulating and implementing a broad array of power projects and finances those projects. The central government holds 60.64 percent as on September 30, 2015 of the issued and paid up equity capital. The company is one of only 17 Indian public sector undertakings to have been granted the ‘Navratna’ status by the Department of Public Enterprise by virtue of its operational efficiency and financial strength.