Tata Power said on Wednesday it has priced $450-million (over R2,000 crore) 60-year hybrid bond on Tuesday. This is the first dollar denominated hybrid bond from an Indian non-financial in recent years. The deal is also just the second dollar-denominated hybrid bond sale out of Asia this year.
Tata Power?s plan would follow a recent R1,500-crore perpetual bond sale by Tata Steel, underlining the growing interest of local companies in the hybrid instrument. Perpetual bonds are bonds with no maturity date. They are not redeemable, but are attractive since they pay a steady stream of interest forever.
Bhira Investments, a wholly-owned unit of Tata Power, will pay 8.5% on the 60-year note, guaranteed by the company, that is non-callable for the first five years.
The proceeds of the issue will be used to fund Tata Power?s corporate and acquisitive activities and to repay an outstanding loan. Tata Power had consolidated debt of about R23,100 crore as of December 31. The company, which at present has a capacity of 3,000 mw, plans to boost that to 25,000 mw by 2017.