NPCIL may raise Rs 1,500 crore through private bond placement
NPCIL is set to raise bonds worth Rs 1,500 crore through the private placement of bonds route.
By ET Bureau | Updated:
MUMBAI: As banks reach their exposure limits to the power sector, companies like Nuclear Power Corporation of India (NPCIL), which have so far preferred bank credit over the bond market, are now tapping the commercial bond market. NPCIL is set to raise bonds worth Rs 1,500 crore through the private placement of bonds route.
It plans to raise bonds for tenures of 18 months, 10 years and fifteen years which are AAArated by Crisil and Care. An investment banker said, “NPCIL has asked for finer rates than the rates offered to other AAA rated, since NPCIL is not a frequent issuer.
The yields on ten year corporate debt is about 9.70-9.75% and NPCIL is asking for finer rates than that, about 15-20 basis points lower than AAA rated corporate paper.”
According to debt managers, NPCIL is coming to the market after over three years. The Reserve Bank of India data show, the total exposure of banking system to the power sector reached Rs 3-lakh crore as on September 2011.
The coupon rates offered by corporates and non-banking financial companies are linked to the benchmark yields on 10-year government security as on the last day of the previous month and the difference in yields cannot exceed a hundred basis points.
The yields on 10-year government bonds have also fallen after a considerable mellowing down in the RBI’s policy stance.
It plans to raise bonds for tenures of 18 months, 10 years and fifteen years which are AAArated by Crisil and Care. An investment banker said, “NPCIL has asked for finer rates than the rates offered to other AAA rated, since NPCIL is not a frequent issuer.
The yields on ten year corporate debt is about 9.70-9.75% and NPCIL is asking for finer rates than that, about 15-20 basis points lower than AAA rated corporate paper.”
According to debt managers, NPCIL is coming to the market after over three years. The Reserve Bank of India data show, the total exposure of banking system to the power sector reached Rs 3-lakh crore as on September 2011.
The coupon rates offered by corporates and non-banking financial companies are linked to the benchmark yields on 10-year government security as on the last day of the previous month and the difference in yields cannot exceed a hundred basis points.
The yields on 10-year government bonds have also fallen after a considerable mellowing down in the RBI’s policy stance.
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