Power Finance Corp launches Rs 100 crore tax free bonds issue

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PTI: New Delhi, Feb 19 2013, 19:53 IST

State-run Power Finance Corp today said it has launched tax free bonds issue worth Rs 100 crore, which would be utilised for lending purposes, debt servicing and working capital requirements.

The issue, which started on Monday, has an option to retain over-subscription up to the residual shelf limit of Rs 3,890.25 crore.

Central Board of Direct Taxes has authorised the company to raise up to Rs 5,000 crore through tax free bonds in the current financial year. Out of the total, PFC has already mopped up over Rs 1,100 crore.

"The funds raised through this issue will be used for lending purposes, debt servicing and working capital requirements," the firm said in a statement.

Each bond has a face value of Rs 1,000. The issue would close on March 15.

"The coupon rate is 7.38 per cent and 7.54 per cent for retail investors & HUFs, and 6.88 per cent and 7.04 per cent for other investors for a tenor of 10 and 15 years, respectively," the statement said.

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