NTPC to raise $500 million in dollar notes

NTPC, the country’s largest power producer, is planning to tap the foreign bond market to raise as much as $500 million ( Rs2,250 crore) through a dollar denominated issue.

The company management is organising investor roadshows in Singapore, Hong Kong and London over the next two days for the purpose.

Barclays Capital, Citi Bank, Deutsche Bank and Royal Bank of Scotland are the mandated bankers for the issue.

The company is planning to add 5,000mw of capacity in the next fiscal and the funds will to be used for the purpose.

“It is the right time to tap the foreign market as the interest rates there are very low as compared to the Indian market. As of now we are targeting only $500 million but the limit may be raised depending on the coupon rate,” said a company official.

The bond issue with a tenure of 10 years would be listed on the Singapore stock exchange and the company expects the issue to be launched by June 4.

NTPC has big expansion plans in the coming years for its coal and gas-based power plants and is also trying to acquire coal assets abroad. The company has also asked the power ministry to pitch for its needs to raise funds through tax-free bonds in the country. The finance ministry takes the final call on allowing government companies to raise funds through tax-free bonds.
The company has around  Rs20,000 crore of cash reserves on its balance sheet.

The total installed capacity of NTPC from over 27 power stations across the country is around 33,194mw. It is currently constructing power projects with a capacity of 17,000mw and it plans to become a 75,000mw company by 2017.

The power major needs  Rs25,000-30,000 crore per year and may look at raising money domestically or from overseas.