New Delhi: State-run Food Corporation of India (FCI) on Tuesday said it has raised Rs 5000 crore through issue of bonds, which was over subscribed by 1.77 times, to improve its cash flow.
"After eight years, we have raised Rs 5,000 crore through issue of long-term bonds to meet our working capital requirement," FCI Chairman and Managing Director Amar Singh told reporters.
FCI issued bonds at an interest rate of 8.62 percent for 10 years maturity period and 8.80 percent for 15 years, he said, adding that the issue opened on March 21 and closed on the next day.
Singh said the amount raised through bonds would be utilised to meet working capital requirement.
According to sources, FCI -- the government nodal agency for procurement and distribution of foodgrains -- has decided to return the oversubscribed amount as the government's guarantee was only for Rs 5,000 crore.
The FCI is facing financial crunch as the centre has provided Rs 72,000 crore for this fiscal against the dues of more than Rs 1,00,000 crore, including arrears, they said.
FCI sought permission from the Centre to raise funds through bonds as taking cash-credit from banks was proving to be costlier, they added.
FCI's requirement of funds for working capital has enhanced significantly in recent years because of sharp rise in procurement and support price to farmers.
That apart, the agency expenditure on storage of huge stocks has also shot up.
FCI is currently holding 63 million tonnes of foodgrains stocks, which is nearly three times higher than the actual requirement for reserves.