Tag: Green Shoe option

In just two working days since its launch, State-owned Power Finance Corporation’s (PFC) maiden ₹5,000-crore public issue of non-convertible debentures (NCDs) has been oversubscribed, reflecting an overwhelming response to this debt offering.

On the first day of the issue — January 15 — about ₹4,700 crore was raised, and the balance got done on Monday, sources in PFC said. The issue opened on Friday last and was due to be closed on January 29. As much as 80 per cent of the NCD issue is to be allocated to retail and high net worth individual investors.

It maybe recalled that this public issue has a base size of ₹500 crore and a green shoe option of ₹4,500 crore. With PFC having already filed a shelf prospectus with limit upto ₹10,000 crore, this state-owned infrastructure lender dedicated to the power sector, is next expected to roll out the Tranche II during the current fiscal itself.

Also read: Power Finance Corporation NCD: Should you invest?

PFC may wait for a period of two weeks before launching the next Tranche, sources added.

Each NCD — that carries AAA credit rating — has a face value of ₹1,000. Tranche I offered options for tenors of 3, 5, 10 and 15 years. The minimum application is for 10 NCDs. The coupon rates range from 4.65 per cent to 7.15 per cent depending on the tenor and the category of investor making the purchase.

PFC Chairman and Managing Director Ravinder Singh Dhillon had last week said that PFC’s NCD offering was a good bet for retail investors as it provided an alternative investment avenue with better yield and tenors.

Also read: Energy demand to grow 6-7% in FY22; discom finances under pressure: ICRA

At a time when banks were offering rates from 4.5-6 per cent across tenors (upto 10 years) and NSC was offering 5.8 per cent, the returns offered under PFC NCDs — although taxable — are better than other options, the company’s senior management had said.