Power Finance Corporation Limited NCD: Key details you to know

19 Jul 2023 , 03:37 PM

Power Finance Corporation Limited (PFC) is indeed one of the prominent financial institutions in India with a primary focus on the power sector. The organization collaborates with various entities such as Government of India (GoI) agencies, state governments, power sector utilities, other intermediaries within the power sector, and private sector clients. PFC’s main objective is to contribute to the development and execution of policies, as well as structural and procedural reforms, within the power sector in India. It is coming up with a debt offer which is starting for subscription from July 21 to July 28, 2023. Click here to apply in the Power Finance Corporation Limited NCD. 

The company is raising Rs 500 crore from the issue at a price of Rs 1000 each. Investors need to apply for a minimum of 1 NCD in a lot. The company has received rating of CARE AAA, Stable by CARE Ratings Limited, CRISIL AAA/Stable by CRISIL Limited and ICRA AAA, Stable by ICRA Limited.

Power Finance Corporation Limited has reserved 10% quota for institutional investors, 10% for non-institutional investors, 40% for high net-worth investors and 40% for retail investors.

The company will use the net proceeds from the issue for onward lending, financing and repayment of interest and principal amount of borrowings and other general corporate purposes.

These NCDs have tenures of 3, 10, and 15 years. It offers coupon rates from 7.50% to 7.55% based on the selection of investors. The frequency of interest payments will be Annual. Allotment of these NCDs will be in dematerialized mode only. Application is to be made through ASBA mode only.

Check the coupon rates of NCDs of Power Finance Corporation Limited

	Series 1	Series 2	Series 3
Frequency of Interest Payment	Annual	Annual	Annual
Nature	Secured	Secured	Secured
Tenor	3 Years	10 Years	15 Years
Coupon (% per Annum)	7.50%	7.53%	7.55%
Effective Yield (% per Annum)	7.49%	7.52%	7.54%
Amount on Maturity (In Rs.)	Rs 1,000.00	Rs 1,000.00	Rs 1,000.00

RHP:

https://pfcindia.com/DocumentRepository/ckfinder/files/Investors/Power%20Finance%20Corporation%20Limited%20-%20Tranche%20Prospectus-%2017%20July%202023.pdf

 

Tax implications:

• Interest on debentures received by resident debenture holders would be subject to tax at the normal rates of tax in accordance with and subject to the provisions of the I.T. Act.
• As per section 2(29AA) read with section 2(42A) of the I.T. Act, a listed debenture is treated as a long-term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.
• As per section 2(42A) of the I.T. Act, a listed debenture is treated as a short-term capital asset if the same is held for not more than 12 months immediately preceding the date of its transfer.
• In case debentures are held as stock in trade, the income on transfer of debentures would be taxed as business income or loss in accordance with and subject to the provisions of the I.T. Act.
• Income tax is deductible at source on interest on debentures, payable to resident debenture holders at the time of credit/ payment as per the provisions of section 193 of the I.T. Act.

Power Finance Corporation Limited NCD is managed jointly by JM financial Ltd, A.K. Capital Services Limited, SMC Capitals, Nuvama Wealth Management and Trust Investment Advisors Private Limited. KFin Technologies Limited is the registrar of NCD and Beacon Trusteeship Services Limited is debenture trustee to the same.