Rajasthan discom bonds power ahead

By: | Updated: March 23, 2016 1:09 AM

Three Rajasthan discoms have managed to place bonds totalling Rs 22,753.58 crore at coupon rates of between 9.7% and 9.8%.

The UDAY scheme envisages 75% of the debt of discoms of Rs 4.3 lakh crore, as on September 30, being taken over by state governments and converted in a phased manner. (Reuters)The UDAY scheme envisages 75% of the debt of discoms of Rs 4.3 lakh crore, as on September 30, being taken over by state governments and converted in a phased manner. (Reuters)

Three Rajasthan discoms have managed to place bonds totalling Rs 22,753.58 crore at coupon rates of between 9.7% and 9.8%.

All the bonds are guaranteed by the government of Rajasthan and have a tenure 15 years. However, they do not enjoy SLR status that would allow banks to hold them to maintain the statutory liquidity ratio.

Last week, the Rajasthan government had issued bonds worth Rs 28,455 crore to 26 banks at an interest rate of 8.39% under the UDAY (Ujwal Discom Assurance Yojana) scheme. The UDAY scheme envisages conversion of bank loans, which earned them an annual interest rate of 11-12%, into bonds with a moratorium of up to five years on the principal.

This translates into a loss for banks in terms of their net interest income. The bonds do not enjoy SLR status.

Data on the National Securities Depository (NSDL) shows Jodhpur Vidyut Vitran Nigam has issued bonds worth Rs 7,271.06 crore via the private placement route at a coupon rate of 9.7% with the frequency of the interest payment being semi-annual. Jaipur Vidyut Vitran Nigam has issued bonds worth Rs 8,717.40 crore at a coupon rate of 9.8% on similar terms as has Ajmer Vidyut Vitran Nigam, which issued bonds worth Rs 6,765.12 crore at a coupon rate of 9.75% on a semi-annual basis.

The UDAY scheme envisages 75% of the debt of discoms of Rs 4.3 lakh crore, as on September 30, being taken over by state governments and converted in a phased manner. The total accumulated losses of discoms are over Rs 3 lakh crore. Nine states including Jammu and Kashmir have signed the tripartite agreement to participate in the scheme.
Meanwhile, Union power minister Piyush Goyal on Monday tweeted: “Journey towards affordable & uninterrupted power continues with Rs 15,763 cr UDAY bonds placed today, bringing total to Rs 47,894 cr.” However, the names of the state(s) that have issued them and the coupon rates were not mentioned.

Gr5

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