REC to raise up to Rs3,000 crore via tax-free bonds
02 Mar 2012
Power sector lender Rural Electrification Corporation Limited (REC) will issue tax-free secured redeemable non-convertible bonds worth Rs1,500 crore on 6 March to fund its investment programmes.
The bond issue will close for subscription on 12 March.
The board of directors of REC at its meeting today inter-alia approved the prospects for the proposed issue, which is expected to meet its borrowing needs for the current fiscal.
The issue will have an option to retain an equal amount of oversubscription, if any, which would take the total issue size to Rs3,000 crore.
The debentures of face value of Rs1,000 each will be eligible for tax benefits under section 10 (15) (iv) (h) of the Income Tax Act, 1961, as amended, in the hands of investors, REC said in a stock exchange filing.
The 10-year tax-free bond for retail investors will bear an interest of 8.13 per cent and the 15-year bonds will give annual return of 8.32 per cent.