State-owned lending agency Rural Electrification Corporation today launched the public issue of tax free bonds to raise Rs 4,500 crore.
"We are raising Rs 4,500 crore by the issuance of these tax free secured redeemable non-convertible bonds," said REC Chairman and MD Rajeev Sharma at a press conference.
The company which has targetted to raise Rs 30,000 crore during the current financial year ending March 2013, has so far raised Rs 22,000 crore through various instruments and even disbursed the same amount to borrowers.
These bonds are offering interest rates in the range of 7.22 per cent and 7.38 per cent annually.
The issue will remain open from December 3 to 10. The funds raised through this issue will be utilised for general lending operations of REC and associated business objectives.
A K Capital Services, Enam Securities Pvt Ltd, ICICI Securities, Kotak Mahindra Capital Company and SBI Capital Markets are the lead managers to the issue.
In the Budget 2011-12, four infrastructure finance firms were allowed to raise money through such bonds. IRFC and National Highways Authority of India (NHAI) were allowed to raise Rs 10,000 crore each, while Power Finance Corporation and Housing and Urban Development Corporation were allowed to raise up to Rs 5,000 crore each by March.
Meanwhile, REC further plans to raise USD 500 million through external commercial borrowings or ECBs and has initiated the process for that.
"We have invited bids for ECBs and whosoever offers the cheapest rates would be selected," Sharma said.
"We have already raised and disbursed Rs 22,000 crore of the targetted Rs 30,000 crore in the current fiscal," he said. REC has also said that no state electricity board or distribution company has defaulted on payments due to the company.
"None of them (discoms) has defaulted and therefore no NPAs (non-performing assets). Issues are there and they are being dealt with at the highest level," Sharma said.
However, he admitted that discoms in the states of Uttar Pradesh, Rajasthan, Tamil Nadu and Haryana are stressed but their payments have not been impacted. REC is engaged in the financing and promotion of power generation, transmission and distribution including renewable energy projects throughout India.