The company will open the public issue of Rs 700 crore taxfree bonds on September 23 for which the government had given approval, NTPC Chairman and Managing Director A K Jha told journalists at a press conference here.
Earlier in July, the government had approved the plan to raise Rs 1,000 crore through taxfree bonds, including Rs 700 crore through public issue.
NTPC was among seven staterun entities, including NHAI and IRFC, which were given permission to raise Rs 40,000 crore in the current fiscal through taxfree bonds.
"While 40 per cent of the issue is reserved for allocation to retail category. The remaining issue will be for non-retail investors including QIB, corporates and High Networth Indians," NTPC Director (Finance) K Biswal said.
"For a person in the 30 per cent tax bracket the effective pre-tax yield is 10.88 per cent approx in 20 year option. The coupon rates are more attractive than the returns from FD (fixed deposits) which hover in the range of 7.5 to 8.75 per cent per annum for various maturities," Biswal explained.
The issues has three tenures - 10 years, 15 years and 20 years. For retail investors the coupon rate is 7.36 per cent for 10 years tenure, 7.53 per cent for 15 years and 7.62 per cent for 20 years. Similarly, for non-retail investors, the coupon rate is 7.11 per cent for 10 years, 7.28 per cent for 15 years and 7.37 per cent for 20 years.
NTPC has been allowed to issue Rs 1,000 crore tax-free bonds, of which the company has already issues Rs 300 crore on private placement basis to institutional investors which was oversubscribed by 7.25 per times.