NTPC raises about Rs 3,100 cr through bonds in global markets

KOLKATA: State-run power generator NTPC’s medium-term note offering was oversubscribed by more than 4.6 times on the day of issuance in international markets, according to the company.

The issue, rated ‘BBB-’ by Fitch, mopped up over $2.3 billion within an hour of opening, surpassing the company’s target of raising $500 million. The issue opened and closed on Thursday. “Taking advantage of a strong primary credit market with renewed interest in Indian credits, NTPC launched a benchmark size, senior, unsecured, fixed rate 10 year bond transaction with an initial price guidance of US Treasuries (UST) plus 230bps area on 19 November,” the company said in a statement.

According to NTPC, at Asia close, the guidance was subsequently revised to T+205-215 bps. The final order book was over US$2.3 billion with orders from 160 accounts. “On the strength of a large order book, the company could price the bonds at the tighter end of the range at UST+205bps, with the coupon fixed at 4.375% p.a, which is the lowest coupon ever achieved by the company for its international bonds,” it said.

Arup Roy Choudhury, chairman and managing director of NTPC, said, “It is an affirmation of our leadership position in the Indian power sector by international investors and renewed interest in India.”

Kulamani Biswal, director of finance at NTPC, said “We are pleased to see the robust demand for our transaction and the strong perception of our credit quality by the international investor community. We are glad to receive a warm welcome from investors on our return to the USD bond market after a gap and at very fine levels inside of comparable secondary levels.”

In terms of geographical distribution, Asia took the bulk of the transaction at 68%, with supplemental demand from Europe and offshore US accounts at 18% and 14%, respectively. The notes were distributed to high-quality fixed income accounts: 53% to fund managers, 20% to banks, 15% to insurance, 8% to official institutions and 4% to private banks and others.

With a robust portfolio of over 23,000MW capacity under execution, the company intends to use the proceeds of the issue to finance its ongoing and new power projects.

Barclays, Citigroup, Deutsche Bank, HSBC and SBI Capital Markets acted as joint book-runners and lead managers.