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State-run National Thermal Power Corporation (NTPC) Ltd will issue bonus debentures of Rs 10,360 crore against the company's free reserves. As of March 31, 2014, NTPC has cash worth Rs 72,418 crore.
Existing shareholders will get one fully paid-up bonus debentures having face value of Rs 12.50 against each equity share of Rs 10 face value. Coupon rate on the debenture will be 50 basis points higher that the annualised average 10-year G-Sec yield.
The government holds 75% equity in the country's largest power generator.
According to the company, the issue of debentures will help NTPC improve its return on equity (RoE). The company's board of directors approved the debenture issue yesterday. It would now require approval of the government, a company executive said.
Shares in NTPC on Wednesday ended 2.03% lower on the Bombay Stock Exchange at Rs 139.45 a piece.
