PSUs may Float $1 b Masala Bonds in UK

En­ergy sec­tor com­pa­nies may go to mar­ket with smaller is­sues in the range of $150-200 mil­lion

The Economic Times - - Economy & Companies - Our Bureau

New Delhi: Pub­lic sec­tor com­pa­nies in­clud­ing NTPC, Power Fi­nance Corp and Ru­ral Elec­tri­fi­ca­tion Corp are likely to float ru­pee-de­nom­i­nated debt in­stru­ments, or masala bonds, in the UK to raise $1 bil­lion in next three-to-four months to fund the country's am­bi­tious re­new­able en­ergy plans. “Com­pa­nies in­clud­ing NTPC, Neyveli Lig­nite Corp, Power Fi­nance Corp, Power Trad­ing Corp and Ru­ral Elec­tri­fi­ca­tion Corp are likely to launch th­ese ma- sala bonds to­talling $1 bil­lion (about .₹ 6,600 crore) in the next three or four months in the UK to gauge the in­vestor ap­petite,” power min­is­ter Piyush Goyal said on Wed­nes­day.

The tenor of th­ese bonds is likely to be limited to a band of five to seven years and th­ese are go­ing to be in smaller de­nom­i­na­tions rang­ing from $150-250 mil­lion, or about .₹ 990-1,650 crore. Th­ese will be sub­ject to de­ci­sions made by the boards of the PSU en­ergy com­pa­nies, he said.

In ad­di­tion, En­ergy Ef­fi­ciency Ser­vices Ltd could ex­plore is­suance of green Masala Bond sub­ject to credit rat­ing, Goyal said at a round ta­ble on ‘Fi­nanc­ing Re­new­ables and En­ergy Ef­fi­ciency’ in Lon­don. The In­dian Re­new­able En­ergy De­vel­op­ment Agency Ltd (IREDA) is also co­or­di­nat­ing a $1-bil­lion equity fund in the re­new­able space.

This will be pro­fes­sion­ally man­aged by an in­de­pen­dent in­ter­na­tional fund man­age­ment com­pany. In­dian pub­lic sec­tor com­pa­nies have al­ready com­mit­ted $315 mil­lion, the min­is­ter said.

In­dia tar­gets re­new­able en­ergy gen­er­a­tion of 175 GW by 2022 and is ex­plor­ing in­ter­na­tional mech­a­nisms of to fi­nance the re­new­ables sec­tor. In 2015, IFC is­sued the first masala bond listed on the Lon­don Stock Ex­change. The bonds worth over .₹ 1,000 crore were is­sued in a range of tenors, in­clud­ing a ten-year, .₹ 10 bil­lion ru­pee-de­nom­i­nated bond to raise funds for in­fras­truc­ture projects.

Masala bonds are pri­mar­ily ru­pee de­nom­i­nated bonds is­sued to over­seas buy­ers.


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