Nuclear Power Corporation of India (NPCIL) plans to raise Rs 6,000 crore in FY16 of which close to Rs 2,500 crore will likely be raised via bonds, said a source in the company. The bonds are likely to have a tenure of 15 years with staggered payments starting from the 11th year, the source added. The state-owned company will use the money to fund projects in Rawatbhata, Kakrapar and Koodankulam.
“In June, we raised Rs 1,200 crore through a term loan from ICICI Bank at the base rate. We are now looking to raise a minimum of Rs 2,500 crore via bonds in mid-July. After that, we will take a call in October or November — depending on market conditions — on whether to raise the remaining amount from the bond market or through term loans,” said the source.
NPCIL’s total borrowing for FY15 stood at Rs 6,400 crore. The company had raised Rs 4,400 crore in two tranches of bond issues. The first tranche was issued in November 2014 when it raised Rs 2,200 crore at a coupon rate of 8.4%. In March this year, it raised another Rs 2,200 crore at 8.14% to be paid semi-annually.
“If NPCIL comes to the bond market in mid-July, it will have to pay more than what it did in March this year. Corporate bond yields have hardened with looming Greek crisis and the 10-year benchmark yield trading close to its peak,” said Ashish Jalan, assistant vice-president, SPA Securities.
The company will review its options from time to time, sources said. “Even last year, we had approached the bond market late. If there are any new projects or if there is some additional funding requirement, we will take a call in September,” he said.
The public sector company is also evaluating options to raise funds through the overseas bond market, according to the source.
“We are just considering this option and it is in a very nascent stage. There are a lot of things to be considered because of the strategic importance of the company. If you are issuing bonds outside the country, a number of disclosures have to be made, which we cannot afford,” he stated.