NTPC to issue Rs 700 cr of tax-free bonds this week

To open on Wednesday; 40% reserved for retail investors

State-owned NTPC is set to issue Rs 700 crore of tax-free bonds — 40 per cent will be for retail investors. The issue will open on Wednesday.

In December 2013, the firm had carried out a private placement of bonds of Rs 300 crore for institutional investors. It was subscribed 7.25 times.

Chairman and managing director A K Jha said the firm might surpass its capital expenditure target of Rs 23,000 crore for this financial year, adding it had spent Rs 5,850 crore in the June quarter. Capital expenditure are funds used by a company to acquire or upgrade physical assets. It is often used to undertake new projects or investments by the firm.

The shareholders have approved raising Rs 5,000 crore through non-convertible debentures in the domestic market in a year.

On issuing $1 billion of rupee-denominated bonds issued in capital markets abroad, the company said it was waiting for the central bank’s guidelines on the issue.

“NTPC has planned to raise rupee-denominated ‘global rupee’ bonds worth $1 billion to finance its capital expenditure. The funds will mainly be used to expand generation capacity,” said K Biswal, director, finance.

The company’s capacity is 45,548 megawatts (Mw); 23,004 Mw are in various phases of completion. “Of the nine mines, Pakri-Barwadih is in an advanced stage and we have a target to begin production from the mine this year. We are hopeful in two years, we will start production in three other mines,” Jha said.

In March, NTPC was re-allotted five coal blocks, the allocation of which was cancelled by the Supreme Court last year. These five blocks are the Chatti-Bariatu, Chatti-Bariatu (South) and Kerandari in Jharkhand, Dulanga in Odisha and Talaipalli in Chhattisgarh.