In a significant financial move, Power Grid Corporation of India has announced its board’s approval to raise a substantial sum of Rs 2,250 crore through the issuance of bonds. This decision is part of the company’s broader strategy to support its capital expenditure needs for the upcoming financial year (FY24).
The fundraising will be carried out through the issuance of POWERGRID Bonds – LXXIV (74th) Issue for 2023-24, with a base issue size of Rs 500 crore and an additional green shoe option of Rs 1,750 crore. This structure brings the total amount to Rs 2,250 crore. The bonds are designed to be redeemable in ten equal installments, and interest will be paid on an annual basis.
This capital injection will not only finance Power Grid Corporation’s capital expenditure but will also provide inter-corporate loans to its wholly-owned subsidiaries and joint ventures. Additionally, the funds will support general corporate purposes. This will be achieved by securitizing the cash flows of four operational special purpose vehicles (SPVs) up to March 2034. These SPVs include 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 exact interest rate for these bonds will be determined after a bidding process on the Electronic Book Provider (EBP) Platform.
The move by Power Grid Corporation signifies a proactive approach to ensure robust financial health and support its expansive operations and growth plans in the energy sector.