Ahmedabad: State-run power sector lender Rural Electrification Corporation (REC) said its public issue of tax-free bonds aimed at raising up to Rs 4,500 crore will open for subscription on December 3. The issue will close on December 10.
"Our target is to raise Rs 4,500 crore from public. It would be first tax-free bond this fiscal in which upper investment limit for retail investors has been hiked up to Rs 10 lakh from Rs 5 lakh earlier," REC Director (Finance) Ajeet Agarwal told reporters.
"The proceeds shall be utilised for normal lending operations of REC in the power sector and infrastructure projects to augment resource base of the company," he said.
Retail investors will get 50 basis points higher return compared to other categories like QIB, HNI and corporates, Agarwal said.
The secured redeemable non-convertible bonds of Rs 1,000 each will be offered in two series - with coupon rate of 7.72 percent and 7.88 percent in series-I (10 years) and series-II (15 years), respectively, to retail investors.
The minimum application for subscription in retail segment is of Rs 5,000 with an upper limit of Rs 10 lakh, he said, adding "40 percent of the issue is reserved for retail participation."
The company, which has the government mandate to raise Rs 5,000 crore through tax-free bonds, netted Rs 500 crore through private placement on November 21.


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