State-owned REC raises Rs 2,195 crore via bonds of different maturities

Rural Electrification Corporation Ltd. (REC) on Tuesday said it has raised Rs 2,195 crore through bonds of different maturities. The state-owned firm has raised Rs 575 crore via bonds maturing in 15 years at a coupon rate of 7.14 per cent. And it has raised Rs 1,620 crore at 7.10 per cent through bonds maturing in 10 years and four months.

 

REC is a ‘Maharatna’ company under the administrative control of the Ministry of Power, Government of India. It provides long-term loans and other financing products to states, Centre and private companies for creation of infrastructure assets in the country.

  REC was aiming to raise Rs 2500 crore via 15-year bonds. The issuance has a basic amount of Rs 500 crore, and a green shoe option of Rs 2000 crore. Additionally, it was looking to raise Rs 4,000 crore via 10-year bonds. The issuance had a basic issue of Rs 700 crore, with a greenshoe option of Rs 3,300 crore.

 

Market participants said that the company did not raise the entire amount as the investors were demanding a higher coupon.

 

“They were expecting around 7.12 -7.13 per cent for the 15-year paper, that’s why they stuck around the basic amount,” said a dealer.

 

Previously in November, the company had raised Rs 3,000 crore through the issuance of 15-year bonds at a tight pricing of 7.09 per cent. This marked the first long-tenure (10 years and above) bond issuance by a ‘AAA’-rated entity in some time, signalling strong demand from long-term investors, including insurance companies and pension funds.

 

Separately, National Housing Bank raised Rs 3,900 crore at 7.20 per cent through bonds maturing in 82 months. The company was looking to raise Rs 4,000 crore. The issuance had a basic issue size of Rs 1000 crore, with a greenshoe option worth Rs 3,000 crore.