Redeemable Non-convertible Bonds upto the shelf limit of
Rs. 4,500 crores
Chandigarh, 30th
November 2012: Rural
Electrification Corporation Limited (“REC” / the “Issuer” / the “Company”)
(NSE: RECLTD, BSE: 532955), is one of only 16 public sector undertakings to be
granted “NAVRATNA” status by the
Department of Public Enterprise . REC is engaged in the financing and promotion
of Power Generation, Transmission and Distribution including renewable energy
projects throughout India. REC has been authorized by the CBDT
notification dated November 6, 2012 and corrigendum thereof dated November 15,
2012 (“Notification”) to raise funds upto Rs. 5,000 crores through Issue of Tax
Free Bonds. REC has filed the Shelf Prospectus dated November 26, 2012 and Prospectus
Tranche-1 dated November 26, 2012 (together referred as the “Prospectus”) with
the Stock Exchanges, Registrar of Companies and the SEBI. The Issue size under
Tranche-1 Issue stands at an aggregate of Rs. 1,000 crore with an option to
retain oversubscription upto the shelf
limit (i.e. upto Rs. 4,500 crores). These secured, redeemable and
non-convertible bonds are of face value Rs. 1,000 (“Issue”) each in the nature
of debentures having tax benefits under Section 10 (15) (iv) (h) of the Income
Tax Act, 1961, as amended.These bonds being offered, as part
of Tranche- 1 shall bear a fixed rate of interest and are under two Series -
Series 1 and Series 2 having tenure of 10 and 15 years respectively. For all
the categories, the coupon rates for the Tranche 1 Series 1 and Tranche 1 Series
2 stand at 7.22% p.a. and 7.38% p.a. respectively. However, an additional interest at the rate of 0.50% p.a.
shall be payable to Category IV investors for the Tranche 1 Series 1 and
Tranche 1 Series 2 respectively (Retail Individual Investors; those applying
for an amount aggregating upto and including Rs. 10 lacs across all Series in
Tranche-1 Issue). In case the
Bonds held by the original allottees under Category IV Portion are sold/
transferred (except in case of transfer of Bonds to legal heir in the event of
death of the original allottee), the coupon rate shall stand revised to the
coupon rate applicable for allottees falling under Category I, Category II and
Category III Portion.The Bonds proposed to be issued
under this Issue have been assigned the ratings- ‘CRISIL AAA/Stable’ by CRISIL,
'CARE AAA' by CARE, ‘IND AAA’ by IRRPL and ‘[ICRA] AAA’ by ICRA Ltd. The rating
of the Bonds by CRISIL, CARE and ICRA are considered to have the highest degree
of safety regarding timely servicing of financial obligations. The rating of
the Bonds by IRRPL denotes the highest rating assigned in its national rating scale. This rating is
assigned to the "best" credit risk relative to all other issuers or
issues in the country. The Bonds offered through this Issue are proposed to be
listed on the NSE and the BSE.The Issue shall remain open from
December 3, 2012 to December 10, 2012 with an option for early closure subject
to the Issue being open for a minimum of 3 days and Category IV portion being
fully subscribed, as may be decided by the Board of Directors or the Bond
Committee. In the event of such early closure of the subscription list of the
Issue, the Company shall ensure that public notice of such early closure is
published on or before the day of such early date of closure as the case may
be, through advertisement/s in at least one leading national daily newspaper.The funds raised through this
Issue will be utilized towards general lending operations of the Company and
other associated business objectives and to discharge existing debt obligations
which were generally undertaken for business operations.A.K. Capital Services Limited,
Enam Securities Private Ltd., ICICI Securities Ltd., Kotak Mahindra Capital
Company Ltd. and SBI Capital Markets Limited are the Lead Managers to the Issue.
Additionally, SBICAP Trustee Company Ltd. and Karvy Computershare Pvt. Ltd. are
the Trustee for the Bondholders and Registrar to the Issue respectively.
About Rural Electrification
Corporation LimitedREC is a
Non Banking Financial Company (NBFC) – Infrastructure Finance Company (IFC) in
the Indian power infrastructure sector which commenced operations in 1969 for
the purpose of developing the power infrastructure in rural areas. REC is one
of only 16 Indian public sector undertakings to be granted “Navratna” status by
the Department of Public Enterprise by virtue of our operational efficiency and
financial strength.REC is a
listed Public Sector Enterprise and a Government of India (GoI) undertaking
with a standalone net worth of Rs. 14,745 crores as on March 31,
2012. REC is engaged in the financing and promotion of transmission,
distribution and generation including renewable energy projects throughout
India. REC services its clients through a network of 18 project offices
and 2 sub offices spread across India.On the
financial front, the standalone total revenue and net profit for the year ended
March 31, 2012 stood at Rs. 10,509
crores and Rs. 2,817 crores
respectively. The standalone total loan assets (gross) as on March 31, 2012
stood at Rs. 101,426 crores while its
standalone net worth stood at Rs. 14,745 crores as on March 31, 2012.For the
year ended March 31, 2012, the Company sanctioned Rs. 51,297 crores of loans,
including Rs. 23,177 crores relating to generation projects, Rs. 23,540 crores
relating to transmission and distribution projects and Rs. 4,580 crores under
short-term loans. For the year ended March 31 2012, the Company disbursed Rs.
27,820 crores of loans, including Rs. 12,349 crores relating to generation
projects, Rs. 11,711 crores relating to transmission and distribution projects
and Rs. 3,760 crores under short-term loans.
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