PFC's Rs 700 cr tax-free bond issue subscribed 12 times

Eliciting a strong response from investors, Power Finance Corp's Rs 700-crore tax-free bonds issue got subscribed over 12 times on the first day today.
In less than three weeks, this is the second tax-free bonds issue by a public sector enterprise that has received robust investor response. Late last month, power producer NTPC had pre-closed its Rs 700-crore tax-free bonds issue.
PFC's bonds issue, which opened today, has received bids worth over Rs 8,461 crore, according to data available on the exchanges till 1700 hrs. This figure translates to more than 12 times oversubscription.
The issue is open till October 9. The company is offering these bonds, each priced at Rs 1,000, with three tenures -- 10, 15 and 20 years.

The issue size is of Rs 100 crore with an option to retain oversubscription of up to Rs 600 crore for issuance of additional bonds aggregating to a total of up to Rs 700 crore, as per the company's prospectus for the latest bonds sale.
PFC, a leading lender to the power sector, has hit the market with its tax-free bonds sale for the second time this financial year. In July, PFC raised Rs 300 crore through sale of tax-free bonds.

The company has been permitted to raise up to Rs 1,000 crore through issue of tax-free, secured, redeemable, non-convertible bonds for the year ending March 31, 2016.

Funds from the issue would be utilised for "on-lending to infrastructure projects".
Last month, NTPC pre-closed its public issue of Rs 700 crore tax-free bonds as it was oversubscribed 11 times on the opening day.
PFC and NTPC are among the public sector companies that have together been allowed to raise Rs 40,000 crore through sale of tax-free bonds in the current fiscal.
Shares of PFC surged over 11 per cent to close at Rs 251.15 on the BSE.