State-run Energy Efficiency Services Ltd (EESL) has raised Rs 500 crore in its maiden issuance of bonds in the domestic market.
“Domestic bonds worth Rs 500 crore were issued to investors on private placement basis at a coupon rate of 8.07 per cent per annum. These bonds have been rated AA by ICRA and CARE. The maturity of the bonds range from 3.5 to 7 years on STRPP basis,” the Power Ministry said in a press release.
According to the statement, Trust Investment Advisors is the sole arranger of the issue and the bonds are proposed to be listed in the WDM segment of the BSE.
The issuance has been fully subscribed showcasing the faith investors have in the energy efficiency business of the company, it said.
The access to Indian bond markets will be a key milestone for EESL to channelise more investments in the energy efficiency market.
For FY 2016-17, the capex requirement of EESL is Rs 3,500 crore. In view of this requirement, these corporate bonds will be the first of many tranches.
EESL is also planning to introduce Green Masala Bonds worth USD 100 mn (around Rs 700 crore) in November. The company has also tied up with multi-lateral agencies like KFW, AFD and ADB for funding its energy efficient projects.
EESL Managing Director Saurabh Kumar said, “Our requirements from the markets is quite high; however, we are confident of a great response from investors looking at our unique model.”
EESL is a joint venture of NTPC Ltd, Power Grid Corp, Power Finance Corp and Rural Electrification Corp, under the administration of the Power Ministry.
It is working towards mainstreaming energy efficiency and is responsible for the world’s largest energy efficiency portfolio (worth 13 BLN USD over a period of 4 years).
EESL aims to unlock the energy efficiency (EE) and demand side management (DSM) market valued at Rs 1.5 Lakh crore, and implement large-scale EE projects.
It seeks to create market access, particularly in the public facilities (municipalities, buildings, agriculture, industry etc), implement innovative business models, handhold private sector Energy Service Companies (ESCOs) in an effort to ensure replication.
For the year ended March 31, 2016, the company reported total revenue of Rs 715.65 crore and profit before tax (PBT) of Rs 48.12 crore compared to total revenue of Rs 71.10 crore and a PBT of Rs 13.57 crore in the previous year.
The growth of the company during FY 2015-16 has been 10 times in terms of turnover as compared to FY 2014-15, it added.