Power Finance Corporation to sell retail tax free bonds worth Rs 700 crore next week

KOLKATA: State-run Power Finance Corporation is looking to raise Rs 700 crore in retail tax free bonds next week, according to a note sent to investors.

The power financier has kept the coupon between 7.11 per cent and 7.60 per cent depending upon the tenure of the issue. There will be three different maturity periods - 10 years, 15 years and 20 years. Minimum investment would be Rs 5,000 while the face value for bonds is Rs 1,000 each.

The company will hit the market on October 5 and the issue will remain open till October 9. The bonds will be secured redeemable and non convertible in nature.

The sum raised will be utilised towards on-lending to infrastructure projects, mostly in the public sector domain. As on March 31, 2015, about 84 per cent of PFC's financial assistance went to power projects commissioned by public sector companies.

Edelweiss Financial Services, AK Capital Services, RR Investors Capital Services and Karvy Investor Services will manage the public issue.

PFC was allowed to mobilise Rs 1,000 crore in tax free bonds this fiscal. It has already raised Rs 300 crore in July on a private placement basis.

Power or projects, particularly power generation projects, typically involve long gestation periods before they become operational. The government owns 67.80 per cent stake in PFC.