PFC to raise Rs 40K cr in 2012-13

Power Finance Corporation (PFC) plans to raise about Rs 40K crore in the next financial year. It aims to raise about Rs 3,000 crore through domestic corporate bonds. CMD Satnam Singh said, “We aim to raise a minimum of Rs 150 crore through this issue. However, we have kept a greenshoe option and should be able to garner up to Rs 3,000 crore. The response to the issue would decide whether or not we bring out more bond issuances this financial year.”
The company has raised about Rs 32,000 crore in the financial year 2011-12. The funds raised in the next financial year would help fund various power projects across the country. PFC is one of the biggest fund raisers in the country. It is likely to be allowed to issue tax-free bonds in the next financial year.
“The Budget has broadly said the power sector would be given an issuance limit of Rs 10,000 crore for tax-free bonds, and we are hopeful we would also get a substantial share of this limit,” Singh said. Corporate bond yields are expected to remain high in the coming months, and tax-free bonds may be able to provide some cost benefit to issuers.
PFC has also been planning its $1-billion medium term note issue. Singh said, “We had been waiting for the Budget to be announced, for the uncertainty to be over. Now that the Budget is out, we have revived our talks with merchant bankers.” However, with the financial year drawing to a close, the medium-term note issue may spill over to 2012-13, he added.