PFC to raise Rs5,000 crore this fiscal
29 June 2011
Power Finance Corp (PFC) may raise Rs5,000 crore this fiscal through a tax-free bond issue, with which it would be able to raise cheaper loans.
The ministry of finance's approval for the issuance of these bonds is expected in a couple of days.
According to a senior power ministry official, the company was waiting for the ministry of finance's nod to allow PFC to raise Rs5,000 crore through tax-free bonds in the current fiscal.
During the current financial year (2011-12), PFC has set a target for borrowing of Rs30,000 crore.
In May 2011 its follow-on public issue was subscribed 4.34 times; the FPO got bids for 995.4 million shares against 229.5 million shares on offer.(See: PFC's follow-on issue priced at the upper end of Rs203 a share)
KPMG executive director Arvind Mahjan told PTI that the cost of financing had gone up and the tax free bonds would lower the borrowing cost for PFC which was a good way for tapping new sources of finance.