REC tax-free bonds issue to raise Rs 4,500 crore on Dec 3
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REC tax-free bonds issue to raise Rs 4,500 crore on Dec 3

Last Updated: Friday, November 30, 2012, 20:04
 
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REC tax-free bonds issue to raise Rs 4,500 crore on Dec 3
Mumbai: State-run power sector lender Rural Electrification Corporation (REC) on Friday said that its public issue of tax-free bonds aimed at raising upto Rs 4,500 crore will open on December 3.
The issue closes on December 10.

"Our target is to raise Rs 4,500 crore from the public. It would be first tax-free bond this fiscal in which the upper investment limit for retail investors has been hiked upto Rs 10 lakh, from Rs 5 lakh earlier," REC Chairman and Managing Director Rajeev Sharma told reporters here.

The proceeds shall be utilised for normal on lending operations of REC in the power and infrastructure projects.

"We will use the proceeds for lending to the power sector and augumenting our resource base. It will, however, not be for any specific project," he said.

Retail investors would get an advantage of 50 basis points from other categories like qualified institutional buyers (QIBs), high networth individuals (HNIs) and corporates.

The tradable tax-free secured redeemable non-convertible bonds of Rs 1,000 each in two series, offer a coupon rate of 7.72 percent and 7.88 percent in Series-I (10 years) and Series-II (15 years), respectively to retail investors.

The minimum application for subscription in retail segment is of Rs 5,000, with an upper limit of Rs 10 lakh, he said, adding that "40 percent of the issue is reserved for retail participation".

The company has hired AK Capital Services, Enam Securities, ICICI Securities, Kotak Mahindra Capital Company and SBI Capital Markets as the lead managers for the issue.

REC, which has a government mandate to raise Rs 5,000 crore through tax-free bonds, has already raised Rs 500 crore through a private placement on November 21.

PTI



First Published: Friday, November 30, 2012, 20:04


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