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State-owned NTPC Ltd has sought shareholders’ approval to raise Rs5,000 crore through issuance of bonds/debentures on private placement basis in its annual general meeting next month. “The company seeks shareholders’ approval to raise funds up to Rs5,000 crore through issuance of bonds/debentures on private placement basis in one or more tranches in domestic market,” NTPC said in a BSE filing.
According to the statement, the company will table a special resolution to raise the amount of Rs 5,000 crore through bonds in it Annual General Meeting on 18 September. Major portion of capital expenditure requirement of the company has to be funded by debt, NTPC said. It said that the projects of the company are financed by the debt equity in the ratio of 70:30. As per the statement, the board of directors has approved the proposal.
It had recommended passing special resolution in this regard in a meeting last month. Earlier in the day, the company said that its tax-free bonds have been oversubscribed 7.25 times. It targeted raising Rs300 through the bonds but the bids were received for Rs2,175 crore for placing the bonds on private placement route.
Shares of the company were trading at Rs126.90 per piece, up 0.63% at BSE this afternoon.
On tax-free bonds, NTPC on Thursday said its tax-free bonds have been oversubscribed 7.25 times. “Tax Free bonds of NTPC Ltd gets stupendous response... The issue got an overwhelming response and was oversubscribed by 7.25 times across the different tenures,” the company said in a statement.
The company further said that it targeted raising Rs 300 through the bonds but the bids were received for Rs2,175 crore for placing the bonds on private placement route. “NTPC has decided to retain subscription for 10 years of maturity at the coupon rate of 7.15% p.a.,” the company said.
Government had in July allowed seven state-owned entities, including NTPC, NHAI and IRFC, to raise Rs40,000 crore in the current fiscal through tax-free bonds. The National Highways Authority of India has been permitted to raise Rs24,000 crore and Indian Railways Finance Corporation Rs6,000 crore, said a notification issued by the Central Board of Direct Taxes (CBDT).
Housing and Urban Development Corporation was allowed to raise Rs5,000 crore and Indian Renewable Energy Development Agency, Rs2,000 crore. NTPC, Power Finance Corporation and Rural Electrification Corporation can issue tax-free bonds of Rs1,000 crore each.
Retail investors, which include HUFs and NRIs investing on repatriation basis, can invest up to Rs10 lakh in such bonds. Those investing higher amount would be classified as HNIs. The bonds will have a tenure of 10, 15 or 20 years and the interest rates is to be decided with reference to the rates of Government Securities.
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