Rural Electrification Corporation will issue debentures worth Rs 30,000 crore during the current financial year. “Board of Directors of the company has approved issuance of non-convertible debentures up to Rs 30,000 crore through private placement during the current fiscal (2014-15),” REC said in a regulatory filing.
NCDs cannot be converted into shares or equity. They are used for raising long term funds by companies through public issue. REC had targeted to raise Rs 30,000 crore during 2013-14. Of that, it raised close to Rs 27,000 crore till December, including via Rs 4,500 crore tax free bond issues.
The funds raised through the bond issue are meant for general lending operations of the company and other associated business objectives, besides repaying the existing loans. REC had issued tax free bonds worth Rs 2648.41 crore in the financial year 2012-13.
The company’s main objective is to finance and promote rural electrification projects all over the country. It provides financial assistance to State Electricity Boards, State Government Department and Rural Electric Cooperatives for rural electrification projects.
The company scrip was trading at Rs 242, down 0.27% on the BSE.