Power Grid board approves ₹5,000 crore bond issue via private placement – EQ
In Short : The board of Power Grid Corporation has approved a bond issue of ₹5,000 crore through private placement. This move aims to raise funds for financing various infrastructure projects and strengthening the power transmission network. The issuance is expected to enhance the company’s financial stability and support its ongoing efforts to expand and upgrade its services in the energy sector.
In Detail : State-run Power Grid Corporation of India Ltd on Tuesday, October 22, announced the approval to raise funds through its 79th bond issue, aimed at securing up to ₹5,000 crore on a private placement basis. The decision was taken by the company’s ‘committee of directors for bonds’ during a meeting on Tuesday.
The bonds for FY25 will have a base issue size of ₹1,000 crore, with a green shoe option to retain an additional ₹4,000 crore, taking the total potential issue size to ₹5,000 crore, the state-owned firm said in a stock exchange filing.
The bonds are non-convertible, non-cumulative, and redeemable at par after 10 years. Interest payments will be made annually.
The coupon rate for the bonds will be determined through bidding on the electronic book provider (EBP) platform. The bonds will be listed on the BSE and the NSE.
The bonds are unsecured, with no specific charge or security created over the company’s assets.
Power Grid is a leading transmission utility responsible for the bulk transmission of electricity across India.
In July, Chairman and Managing Director R K Tyagi stated that Power Grid is planning an undersea interconnection project with Middle Eastern countries, estimated to cost up to ₹40,000 crore.
Following a subdued June quarter with nearly flat revenues, the company expects its topline to grow by only 4-5% in FY25, he added.
The company aims to invest ₹18,000 crore this fiscal year to boost future growth, Tyagi said.
He explained that as transmission projects age, their earnings decline, making it essential for the company to commission new projects to sustain higher revenue growth.
Shares of Power Grid were trading 1.07% lower at ₹327.45 in the BSE around 11.23 am. The stock has given a return of 15% over the past six months, gaining more than 64% in the last one year. On a year-to-date (YTD) basis, shares of Power Grid Corp have delivered a 38% return in 2024 so far.
