State-run Rural Electrification Corp (REC) has received the Finance Ministry’s approval to raise Rs 3,000 crore through issue of tax-free bonds this fiscal.
The REC has been authorised to “issue, through a public issue, during the financial year 2011-12, tax-free, secured, redeemable, non-convertible bonds of rupees 1,000 each, aggregating to rupees Rs 3,000 crore...,” the Finance Ministry said.
REC Director (Finance) Mr H D Khunteta told PTI that the tax-free bonds issue would open on March 5.
“We plan to utilise the proceeds mainly for loan disbursements,” he added.
The interest rate on the bonds will not be less than 50 basis points below the yields on Government Securities (G-secs).
However, “a higher coupon rate of up to 20 basis points may be offered to retail individual investor vis-a-vis the rate offered to Qualified Institutional Buyers (QIBs), corporate and High Networth Individuals (HNIs),” the ministry added.
Tenure of the bonds could be 10 or 15 years, the ministry added.
A leading lender for the power sector, REC had planned to mop up to Rs 28,000 crore this fiscal and so far, about Rs 23,000 crore has been raised.