NTPC is set to raise Rs 300 crore through 10-year tax-free bonds at a coupon rate of 7.15% via the private placement route, bond arrangers said.
“NTPC received a good response for its tax-free bond issue with the bid size amounting to nearly Rs 2,000 crore across maturities of 10, 15 and 20 years. The company decided to retain Rs 300 crore through the 10-year maturity,” a bond arranger close to the development said adding that the price range for the bonds was from Rs 100.03 to Rs 100.07.
The company has been allotted a tax-free bond limit of Rs 1,000 crore for the fiscal year 2016 out of which Rs 300 crore could be raised through the private placement route.
On Monday, Indian Railway Finance Corporation (IRFC) also managed to mobilise Rs 329 crore through its 10-year tax-free bond issue at 7.15%.
Few weeks back, the company had raised Rs 1,139 crore at a coupon rate of 7.19% via 10-year tax-free bonds.
IRFC has been allotted a tax-free bond limit of Rs 6,000 crore for FY16 out of which Rs 1,800 crore could be raised through the private placement route.
For this fiscal year, seven companies have been allotted a total limit of Rs 40,000 crore to be raised through tax-free bonds.
NHAI has been given the largest allotment at Rs 24,000 crore while HUDCO has been permitted to raise Rs 5,000 crore through tax-free bonds. IREDA has been allowed Rs 2,000 crore while PFC, REC and NTPC could raise R1,000 crore each.
Tax-free bonds had made a comeback this fiscal after remaining absent in FY15. They were introduced in 2011-12 with an overall limit of Rs 30,000 crore to boost infrastructure spending.
In 2012-13, the limit was doubled to Rs 60,000 crore. However, companies just raised Rs 18,000 crore through these bonds which was way below the target. In FY14, the limit was kept at Rs 50,000 crore against which companies borrowed Rs 49,200 crore.