POWER Finance Corporation (PFC), a government of India undertaking company, plans to raise Rs 5,300 crore from the public issue of infrastructure bonds.
The issue will open for public subscription on February 24 and closes on March 22, 2011. The issue will not be more than 25 per cent of the incremental infrastructure investment made by the company during 2010-11.
India Infrastructure Finance Company (IIFCL), IDFC and L&T Infrastructure Finance are the some of the other infrastructure finance companies that have launched public issue of infrastructure bonds in recent days. While IIFCL is raising Rs 1,200 crore, L&T Infrastructure Finance is raising Rs 400 crore, which includes green-shoe option.
PFC's bond will be of a face value of Rs 5,000 and would be listed on the Bombay Stock Exchange.
"We are in a position to take advantage of strong growth in power sector," Satnam Singh, chairman and managing director, said at a press conference.
Investors can avail tax benefit of Rs 20,000 for the current financial year 201011 under section 80CCF of the income tax act, 1961.
The bonds will have a fixed rate of interest of up to 8.5 per cent and shall be payable annual or on a cumulative basis. The bonds offered will be in maturities of 10 years and 15 years with a buyback option after 5 years and 7 years respectively.
The proceeds of the issue will be utilised to finance infrastructure projects in the country, he said.
The company's loan portfolio stands at Rs 92,000 crore as on December 31, while the government expects Rs 100,000 crore investment in the power sector in the next five years, he said.
ICICI Securities and SBI Capital Markets are the lead managers to the issue.
