State-run Rural Electrification Corp today received board approval to raise up to Rs 3,000 crore through issue of tax-free bonds in the current fiscal.
The power sector lender today said it would raise at least Rs 1,500 crore through tax-free bonds issue, with an option to retain over-subscription.
With that option, the company could mop up as much as Rs 3,000 crore, the firm said in a regulatory filing.
"The Board of Directors of the company in its meeting held on March 2... Has approved the prospectus for proposed public issue of tax-free secured redeemable non-convertible bonds of face value of Rs 1,000 each, in the nature of debentures, during the financial year 2011-12," it noted.
The Finance Ministry last month allowed REC to to garner up to Rs 3,000 crore through tax-free bonds issue.
Interest rate on the bonds will not be less than 50 basis points below the yields on Government Securities (G-secs).
On February 21, REC Director (Finance) H D Khunteta said the tax-free bonds issue would open on March 5.
REC plans to raise up to Rs 28,000 in the current fiscal.
Shares of the company fell 1.1% to close at Rs 207.35 on the BSE.