REC plans to garner Rs 700 crore via tax-free bonds

NEW DELHI: State-owned Rural Electrification Corp (REC) plans to raise up to Rs 700 crore through issue of tax-free bonds this fiscal to meet various funding needs.

This is on top of the Rs 300 crore already raised by the company through private placement.

REC, leading lender for the power sector, is authorised to raise Rs 1,000 crore via tax-free bonds.

As per the draft prospectus filed with markets regulator Sebi, the company's public issue of secured redeemable non-convertible bonds would be of face value of Rs 1,000 each, having tax benefits, aggregating up to the shelf limit (Rs 700 crore) by way of issuance of bonds in one or more tranches in the fiscal 2016.

"The main objects clause of our Memorandum of Association permits our company to undertake its existing activities as well as the activities for which the funds are being raised through this bond issue," it added.

A K Capital Services and Edelweiss Financial Services will manage the company's issue.