NTPC raises $500 million through bonds

NTPC raises $500 million through bonds

New Delhi: State run NTPC Ltd’s $500 million bond issue in the international market received a good investor response after India’s largest power generation utility tapped the world market after a gap of five years in July.

“The transaction received tremendous response and the final order book had over 230 investors with total order value in excess of $2.7 billion. This enabled the company in achieving its target issue size of $ 500million," the company said in a statement on Monday.

Barclays Capital, Citigroup, Deutsche Bank and The Royal Bank of Scotland were the bookrunners for the bond issue.

This comes at a time when funding for new power projects has been losing steam and there is volatility in the international markets in the wake of Greek debt crisis.

India’s largest power generation company has a power generation capacity of 34,584 MW, plans to increase its installed capacity to 75,000MW by 2017 which will require a capital expenditure of around 1,50,000 crore during the 12th plan.

NTPC reported a net profit of 9,102.59 crore on revenue of 59,247.84 crore in 2010-11.

The utility recently signed a 10,000 crore loan agreement with State Bank of India(SBI) on Friday, making it the largest loan extended to any company by the country’s biggest lender.

NTPC alone would require an investment of around 30,000 crore annually, leading to a capital expenditure of around 15 trillion during the 12th Plan. A bulk of this, just over 1 trillion, will be raised as debt. NTPC currently has debt of around 37,783 crore on its books.

India’s power sector is facing an acute shortage of funds. The 11th Plan (2007-12) targeted an addition of 78,577MW of power generation capacity, requiring an investment of 10.31 trillion. The power ministry estimates there will be a shortfall of 4.51 trillion. The sector will need investment of $400 billion during the 12th Plan.