NTPC to Raise ₹4,000 Crore via Non-Convertible Debentures
State-owned power giant NTPC Ltd has announced plans to issue unsecured, non-convertible debentures (NCDs) worth ₹4,000 crore on March 20 through a private placement, according to a recent report by CNBCTV18.
The NCDs will be issued at a coupon of 7.26% per annum for a tenure of 15 years, maturing on March 20, 2040, according to a stock exchange filing. This move is expected to help NTPC raise the necessary funds to support its growth plans and expansion initiatives.
The announcement comes at a time when the Indian power sector is witnessing a significant shift towards renewable energy sources, driven by the government’s ambitious targets to reduce carbon footprint and increase the share of clean energy in the overall energy mix. As the largest power utilities company in India, NTPC is well-positioned to benefit from this trend and capitalize on the growing demand for clean energy.
The power sector has been a key driver of India’s economic growth, accounting for nearly 25% of the country’s GDP. The sector has been undergoing a significant transformation in recent years, with a focus on grid modernization, distribution reforms, and the integration of renewable energy sources.
NTPC’s decision to raise funds through NCDs is a strategic move to tap the debt market, given the company’s strong credit profile and the favorable interest rate environment. The coupon rate of 7.26% per annum is competitive compared to other debt instruments available in the market, making it an attractive proposition for investors.
The NCDs will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), providing investors with an opportunity to participate in NTPC’s growth story. The issue is expected to be oversubscribed, given the company’s strong track record and the growing demand for debt instruments among institutional investors.
The power sector is expected to remain a key driver of growth in India, driven by the government’s initiatives to increase the share of renewable energy sources, improve grid infrastructure, and enhance energy efficiency. NTPC’s plans to raise funds through NCDs are a testament to the company’s commitment to supporting the growth of the power sector and its role as a key player in India’s energy landscape.
In conclusion, NTPC’s decision to raise ₹4,000 crore via non-convertible debentures is a strategic move that will help the company raise the necessary funds to support its growth plans and expansion initiatives. The coupon rate of 7.26% per annum is competitive compared to other debt instruments available in the market, making it an attractive proposition for investors. As the largest power utilities company in India, NTPC is well-positioned to benefit from the growing demand for clean energy and the transformation of the power sector.
