PFC Closes Rs 5000 Crore Bonds Issue 11 Days Ahead of Schedule

Budget reactions

The first Rs 5000 crore NCDs issue of PFC was subscribed close to nine times and closed for subscription 11 days ahead of the schedule

The Power Finance Corporation’s (PFC) first Rs 5000 crore taxable non-convertible debentures (NCDs) issue was subscribed close to nine times on January 18, 2021, and closed for subscription 11 days ahead of the schedule, according to BSE data.

The state-owned financial institution working as the financial backbone of the Indian power sector has planned to raise Rs 10, 000 crore through bonds in two tranches.

The first tranche of Rs 5,000 crore, including Rs 4,500 crore green-shoe option, opened for subscription on January 15, 2021, and was scheduled to close on January 29, 2021. But the issue had to be closed on January 18, 2021, the second day of trading, due to over-subscription on BSE.

According to the BSE data, subscribers applied for 4,47,76,348 bonds or NCDs of Rs 1,000 each against 50 lakh bonds on the offer (with 4.5 crore NCDs under the green-shoe option) on the offer. Thus, the PFC received a subscription worth Rs 4,477.63 crore against Rs 500 crore base issue size of NCDs on offer (with a green-shoe option of Rs 4,500 crore).

The overwhelming response to the bond issue is expected to encourage the firm to come out with the second bond issue of Rs 5,000 crore during the current financial year, a source said. 

Last week, PFC Chairman R S Dhillon had told reporters that the issue would be allotted on a first-come-first-serve basis and in case of over-subscription, the allotment would be done proportionately.

Dhillon had also said the company would bring more such bond issues going forward. About raising the entire Rs 10,000 crore during this fiscal itself, he had said it would be done based on response to the issue.

In September 2020, the NBFC had said that it expects additional funding requirements in a range between Rs 30,000 crore and Rs 35,000 crore to meet the obligation for enhanced funding for power Discoms in near future.