Essel Infra arm raises ₹680 cr via bond issue

MUMBAI: A unit of Essel Infraprojects Ltd raised ₹680 crore through a rare-structured bond issue, which is supported by the monthly payments it gets from Power Grid Corp of India Ltd’s (PGCIL) centralised transmission charge collection mechanism, according to two people aware of the development.

In its debut issue, NRSS XXXI (B) Transmission Ltd, which has set two 400 kV double circuit transmission lines, sold nonconvertible debentures (NCDs) with up to 22 years of maturity. The NCDs will be repaid quarterly. Accordingly, there are 88 quarterly principal and interest repayment structures, said one of the two people cited.

“Since the company gets monthly payments from PG C IL, which is the central transmission utility, it was decided to retire bond liabilities in a staggered manner to avoid bunched-up repayments at maturity,” said the person requesting anonymity.

Such a repayment format, involving series of bonds under one structure, accommodates different investors because not all buyers have appetite for longer maturity securities, according to bond dealers. Axis Bank acted as the sole arranger for the deal.

The bonds are rated AAA( SO ), the highest investment grade by India Ratings and CARE Ratings.