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Dilip Bisoi
Bhubaneswar, Oct 10: Grid Corporation of Orissa (Gridco), the state-owned transmission & distribution concern, has successfully completed its Rs 300-crore borrowing programme by mopping up Rs 191 crore from the debt market in its second bond issue. In February 1997, it had raised Rs 109 crore through its first bond issue.
"We are expecting around Rs 197 crore subscription to the issue. Confirmations have already been received for about Rs 189-crore subscription," Gridco's director (finance), R Mishra, told The Financial Express. He said the corporation would retain Rs 191 crore from the issue completing the Rs 300-crore borrowing plan. According to him, the fund would be utilised to meet Gridco's working capital requirement and to finance its share in the forthcoming projects.
Mishra said that the success of the bond issue indicated that the investors expressed their faith in the power sector reforms that were being carried out in Orissa and also in the state government's counter guarantee. He saidthat despite Crisil downgrading the state government's rating, the issue received good response from the investors. Banks, port trusts, regional rural banks and provident funds, mostly from other states, subscribed to the bonds, he said.
Gridco had entered the market on August 19 this year with a bond issue of Rs 100 crore, having a greenshoe option for Rs 90 crore. The offer in this issue was regular return bonds with a face value of Rs 1 lakh each. The tenure of the instrument is seven years and is to be redeemed in two equal installments at the end of the sixth and seventh years. There is also a put and call option after four years.
The coupon rate on the offer is 15.25 per cent payable semi-annually thereby resulting in an annualised yield of 15.87 per cent to 15.97 per cent. Interest payments and principal repayments are guaranteed by the Orissa government through an escrow account mechanism. The issue, arranged by Apple Finance Ltd, closed on September 29.
Gridco, in fact, came out with the issuewhen the market was overcrowded by bond issues. There were three major issues from the Maharashtra government and one from the Andhra Pradesh government, besides one from the Kerala State Electricity Board. But despite the tough competition in the market, Gridco came out successfully in mopping up the targeted Rs 191 crore.
"Our coupon rates were more competitive compared to the rate of developed states like Andhra Pradesh and Maharashtra. While the Maharashtra State Electricity Board has offered 14.5 per cent and Andhra Pradesh State Electricity Board 15 per cent, Gridco's instruments were priced at 15.25 per cent," corporation's director (finance) said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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