PFCs Rs 250-crore Zero Coupon Bond Oversubscribed

Mumbai, December 24: | Updated: Dec 25 2002, 05:30am hrs
The state-run Power Finance Corporations (PFC) zero coupon bond with face value of Rs 250 crore for 20 years was oversubscribed. The Corporation has received applications for around Rs 2,200 crore (actual value is Rs 431 crore).

Meet To Look At NHDC Rupee Loan

The PFCs board meeting scheduled for December 26 will consider the Narmada Hydro Development Corporations (NHDC) rupee term loan proposal of Rs 2,000 crore. Mr Krishnamoorthy said that this proposal would be one of the topics on its agenda for the board meeting. The NHDC is a joint venture between the National Hydro Power Corporation and the Government of Madhya Pradesh.

The PFC director (finance) R Krishnamoorthy told FE that the bond was floated on December 23 and closed by the evening. The list of some of the investors include UTI, ICICI Group, HSBC and Sahara, he said. According to Mr Krishnamoorthy, the proceeds would be used to finance the power sector. The Corporation will decide about the extent to which it will retain the oversubscription, he said.

Mr Krishnamoorthy said that PFC was examining the possibility of creating a benchmark for long-term funding. He recalled that the Corporation had raised Rs 200 crore for 15-year term and the proceeds of which would be mainly utilised for funding the projects in the hydro sector.

Mr Krishnamoorthy along with its additional general manager AK Jain said that the Corporation has lent Rs 500 crore to the Gujarat Mineral Development Corporation for its 250 mw Akrimota thermal power station.

Mr Jain informed that the project envisages an outlay of Rs 1,395 crore and was being funded at a debt-equity ratio of 80:20.

The higher debt component of 80 per cent would help in keeping the tariff on the lower side, he added.

Mr Jain said that the debt funds have been completely tied up and loan documents were signed on December 20. Major lenders to the project include PFC, State Bank of India and Life Insurance Corporation. PFC is the largest lender to the project with an exposure of Rs 500 crore. SBI Capital Markets were the advisor and arrangers for the projects debt and short-term debt, he added.

Mr Krishnamoorthy said that PFC has appointed SBI Caps to advise on the establishment of India Power Fund (IPF), mainly with an objective to finance power sector requirements. The Corpora-tion has been given a mandate by the Union power ministry for setting up an IPF.