Power Grid Corp to raise up to Rs 2,250 crore via bonds to fund capex

The bonds are redeemable at par in 10 equal instalments and interest payment on a yearly basis

The state-run Power Grid Corporation on Monday announced that its board has approved a proposal to raise up-to Rs 2,250 crore through the issuance of bonds to fund its capital expenditure. In a regulatory filing, the company stated that the Committee of Directors for Bonds, in their meeting held on September 25, 2023, approved raising up-to Rs 2,250 crore in the financial year FY24, in the second tranche.

The POWERGRID Bonds - LXXIV (74th) Issue 2023-24 will come with a base issue size of Rs 500 crore and a green shoe option (additional) of Rs 1,750 crore, taking the total fundraise to Rs 2,250 crore. The bonds are redeemable at par in 10 equal instalments, with interest payments on a yearly basis.

According to the filing, this fundraising will part-finance the company's capital expenditure requirement, provide inter-corporate loans to wholly-owned subsidiaries/joint ventures, and serve general corporate purposes by securitising cash flows of four operational special purpose vehicles (SPVs) up to March 2034.

"In terms of Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is to inform you that the Committee of Directors for Bonds, in their meeting held today, i.e., on 25th September 2023, have approved the raising of up-to Rs 2,250 crore in FY24 in the second tranche to part-finance its capital expenditure requirement, provide inter-corporate loans to wholly-owned subsidiaries/joint ventures, and for general corporate purposes by securitising cash flows of four operational SPVs...," the filing read.

The four operational SPVs are POWERGRID Bhuj Transmission Ltd (PBTL), POWERGRID Khetri Transmission System Ltd (PKTSL), POWERGRID Medinipur Jeerat Transmission System Ltd (PMJTL), and POWERGRID Varanasi Transmission System Ltd (PVTSL).

The interest rate will be decided after bidding at the Electronic Book Provider (EBP) Platform.