Public Issue of Debentures amounting to Rs 5,000 crores by Power Finance Corporation Limited opens on January 15, 2021

 ·         Debentures of Power Finance Corporation, offers coupon rates ranging upto 7.15% p.a.^$ across maturities

·         Rs. 500 crores base Issue size; option to retain oversubscription up to Rs. 4,500 crores aggregating upto Rs. 5000 crores, which is within the shelf limit of Rs 10,000 crores

·         Credit Ratings: ‘CARE AAA; Stable’ by CARE Ratings Limited (“CARE”); ‘CRISIL AAA / Stable’ by CRISIL Limited (“CRISIL”); and ‘[ICRA]AAA(Stable)’ by ICRA Limited (“ICRA”)

·         Allotment on first-come, first-served basis

·         NCDs only in dematerialized form

·         First public issue of NCD to offer option of applying through UPI Mechanism to retail individual investors for an application amount of up to Rs. 200,000/-

 

 

Mumbai, January 14, 2021: Power Finance Corporation Limited, is one of the leading financial institutions in India, focused on the power sector will open its Rs 5,000 crores public issue of secured, redeemable Non-Convertible Debentures on January 15, 2021. The base Issue size is Rs. 500 crores with an option to retain oversubscription of up to Rs. 4,500 crores aggregating up to 5,000 crores which is within the shelf limit of Rs 10,000 crores. The NCDs are of face value of Rs 1,000 each. The Tranche I Issue is scheduled to close on January 29, 2021 with an option of early closure or extension as decided by PFC’s Board of Directors or a duly constituted committee thereof^@.

 

The Tranche I Issue offers options for tenures of 3, 5, 10 and 15 years. The 3-year tenure NCD in Series I will offer a fixed coupon rate of 4.65% p.a to 4.80% p.a., while the 5 year tenure NCD in Series II will offer fixed coupon rate of 5.65% p.a. to 5.80% p.a. depending on the category of investors. The 10-year tenure NCDs offers options of both fixed and floating rates of interest. The fixed coupon rate is 6.63%p.a. to 7.00% p.a. The floating coupon rate, on the other hand, is based on Benchmark FIMMDA 10Yr G-Sec (Annualised) + spread of 55 basis points to 80 basis points, subject to floor and cap rate depending on the category of investors. The 15-year tenure NCD offers a range of fixed coupon rates with maximum coupon rate of 7.15% p.a.

 

The minimum application size is for 10 NCDs aggregating to Rs. 10,000 collectively across all series of NCDs and in multiples of One (1) NCD of face value of Rs. 1000 each thereafter.

 

The NCDs offered through the Shelf Prospectus and the Tranche I Prospectus both dated January 11, 2021 are proposed to be listed on BSE Limited. The Lead Managers to the Issue are Trust Investment Advisors Private Limited, A. K. Capital Services Limited, Edelweiss Financial Services Limited and JM Financial Limited.

 

Ratings by CARE, CRISIL & ICRA indicate ‘High degree of safety’

The NCDs proposed to be issued under the Issue have been rated ‘CARE AAA; Stable’ by CARE Ratings Ltd, ‘CRISIL AAA / Stable’ by CRISIL Ltd (“CRISIL”); and ‘[ICRA]AAA(Stable)’ by ICRA Ltd. NCDs with these ratings are considered to have the highest degree of safety regarding timely servicing of financial obligations and such instruments carry lowest credit risk.

 

Key Terms of the Issue Structure:

Issue Structure
Series	I	II	III	IV*	V	VI	VII
Interest Type	Fixed	Fixed	Fixed	Fixed	Floating#	Fixed	Fixed
Frequency of Interest Payment	Annual	Annual	Quarterly	Annual	Annual	Quarterly	Annual
Tenor	3 Years	5 Years	10 Years	10 Years	10 Years	15 Years	15 Years
Coupon (Per cent.) for category I & II	4.65%	5.65%	6.63%	6.80%	Benchmark FIMMDA 10Yr G-Sec (Annualised)+ 55 BPS	6.78%	6.95%
Coupon (Per cent.) for category III & IV	4.80%	5.80%	6.82%	7.00%	Benchmark FIMMDA 10Yr G-Sec (Annualised) + 80 BPS	6.97%	7.15%
Effective Yield (per cent. Per annum) for category I & II	4.65%	5.65%	6.79%	6.80%	-	6.95%	6.95%
Effective Yield (per cent. Per annum) for category III & IV	4.80%	5.80%	6.99%	7.00%	-	7.15%	7.15%
Put and Call Option	Not Applicable
Redemption Amount (Rs. Per NCD	Rs. 1000.00	Rs. 1000.00	Rs. 1000.00	Rs. 1000.00	Rs. 1000.00	Rs. 1000.00	Rs. 1000.00
Redemption Date (from the Deemed Date of Allotment)	3 Years	5 Years	10 Years	10 Years	10 Years	15 Years	15 Years
Minimum Application	Rs. 10,000 (10 NCDs) across all Series collectively
In multiples thereafter	Rs. 1,000 (1 NCD)
Face Value / Issue Price (Rs./ NCD)	Rs. 1,000 (1 NCD)
Mode of Interest Payments	Through various payments available.
Default Series	Series IV

 

# G-sec 10 Yr (annualized) is referred to as FIMMDA 10Yr G-sec benchmark published by FIMMDA Reference computed on an annualised basis as computed by FIMMDA.

# The effective coupon will be subject to a floor rate of 5.80% p.a. and cap rate of 7.30% p.a. for Category I & II Investors and floor rate of 6.00% p.a. and cap rate of 7.50% p.a. for Category III &IV Investors.

* The Company shall allocate and allot Series IV NCDs wherein the Applicants have not indicated their choice of the relevant NCD Series.

 

DISCLAIMER:

^$For further details refer to section titled “Issue Related Information” on page 31 of the Tranche I Prospectus dated January 11, 2021. Allotment in the public issue of debt securities should be made on the basis of date of upload of each application into the electronic book of the stock exchange. However, on the date of oversubscription, the allotments should be made to the applicants on proportionate basis.

 

^@The Tranche I Issue shall remain open for subscription on Working Days from 10.00 a.m. till 5.00 p.m. (Indian Standard Time) during the period indicated above, with an option for early closure or extension by such period as may be decided by the Board of Directors or a duly constituted committee thereof. In the event of such early closure or extension of this Tranche I Issue, our Company shall ensure that public notice of such early closure or extension is published on or before the day of such early date of closure or the initial Tranche I Issue Closing Date, through an advertisement in all the newspapers in which pre-issue advertisement and advertisement for opening or closure of the Tranche I Issue have been given. On the Tranche I Issue Closing Date, the Application Forms will be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) and uploaded until 5.00 p.m. or such extended time as may be permitted by the Stock Exchange. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 PM on one Working Day after the Issue Closing Date. For further details please refer to the chapter titled “Issue Related Information” on page 31 of the Tranche I Prospectus.

 

Capitalised terms not defined herein shall have the same meaning as assigned to such terms in the Prospectus.

 

DISCLAIMER: Power Finance Corporation Limited (“Company”), subject to market conditions, and other considerations, is proposing a public offer of secured redeemable nonconvertible debentures and has filed a Shelf Prospectus and Tranche I Prospectus each dated January 11, 2021 (“Prospectus”) with the Registrar of Companies, New Delhi, BSE Limited (“BSE”) and Securities and Exchange Board of India (“SEBI”). The Prospectus dated January 11, 2021 is available on the website of the Company at www.pfcindia.com, on the website of BSE at www.bseindia.com, on the website of the lead managers at www.trustgroup.in, www.akgroup.co.in, www.edelweissfin.com and www.jmfl.com, and on the website of SEBI at www.sebi.gov.in. Investors proposing to participate in the Issue should note that investment in the NCDs involves a high degree of risk and for details in relation to the same, refer to the Prospectus, including the section titled “Risk Factors” beginning on page 15 of the Shelf Prospectus and the section titled “Material Developments” beginning on page 250 of the Shelf Prospectus dated January 11, 2021.  

DISCLAIMER CLAUSE OF BSE: It is to be distinctly understood that the permission given by BSE should not in any way be deemed or construed that the Prospectus has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the Prospectus. The investors are advised to refer to the Prospectus dated January 11, 2021, for the full text of the Disclaimer clause of the BSE.

 

DISCLAIMER CLAUSE FOR USE OF BSE ELECTRONIC PLATFORM: It is to be distinctly understood that the permission given by the BSE to use their network and software of the Online system should not in any way be deemed or construed as compliance with various statutory requirements approved by the Exchange; not does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company.

 

DISCLAIMER CLAUSE OF ICRA: ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capacity of the issuer concerned to timely service debts and obligations, withy reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statement of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents

 

DISCLAIMER CLAUSE OF CRISIL: A CRISIL rating reflects CRISIL' s current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell or hold the rated instrument does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. CRISIL or its associates may have other commercial transactions with company/entity. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially that it has no financially whatever to subscribers/users/transmitters/distributors of this product. CRISIL Rating criteria are available without charge to the public on the CRISIL website, www crisil.com.

 

DISCLAIMER CLAUSE OF CARE: CARE's ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE's ratings do not convey suitability or price for the investor. CARE's ratings do not constitute an audit on the rated entity. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not. However, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information, most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. CARE or its subsidiaries/associates may also have other commercial transactions with the entity. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is, inter-alia, based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. CARE is not responsible for any errors and states that it has no financial liability whatsoever to the users of CARE's rating. Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument. which may involve acceleration of payments in case of rating downgrades. However, if any such clauses are introduced and if triggered, the ratings may see volatility and sharp downgrades.