Synopsis
NHPC and NTPC Green Energy plan to raise over Rs. 4,500 crore via short-term bonds amid favourable rates, with NHPC targeting Rs. 2,000 crore and NTPC Green considering up to Rs. 3,000 crore.
Indian public sector enterprises NHPC and NTPC Green Energy are planning to raise around Rs. 4,500 crores (roughly $512.6 million) this month through the issuance of short-term bonds, according to sources familiar with the matter.
Short-term interest rates are currently favourable, and the relatively wide spread between 3-to-5-year and 10-year bonds is encouraging both companies to opt for shorter-duration issuances.
Bond market participants anticipate a further softening of short-term yields, especially as the Reserve Bank of India (RBI) is expected to announce a policy decision shortly that may strengthen demand for debt instruments.
1. NHPC Limited
With a market cap of Rs. 84,458.6 crores, the stock is currently trading in the red at Rs. 84.08 on BSE, down by around 1.4 percent. The hydropower firm is planning to issue bonds worth around Rs. 2,000 crore, likely in the 2-year to 3-year maturity range. According to sources, NHPC is expected to be the first among the two companies to tap the market.
Earlier this year in May, the company successfully raised Rs. 1,945 crores via Separately Transferable Redeemable Principal Part (STRPP) bonds, with tenures ranging between 6 to 15 years.
NHPC Limited is primarily involved in the generation and sale of bulk power to various Power Utilities. Other businesses in which the Company is involved include providing project management/construction contracts/ consultancy assignment services, and trading of power.
2. NTPC Green Energy Limited
With a market cap of Rs. 87,465.3 crores, the stock is currently trading in the red at Rs. 103.9 on BSE, down by around 1 percent. NTPC Green Energy, India’s leading state-owned renewable energy company and a key subsidiary of integrated power utility NTPC, is considering its first rupee-denominated bond issuance. The company is targeting a capital raise between Rs. 2,000 crore and Rs. 3,000 crore, primarily via 5-year bonds.
Although the company prefers shorter duration paper, it may consider issuing 10-year bonds if investor interest is robust. The final bond structure and timing are expected to be confirmed after the RBI’s monetary policy announcement.
With bond yields trending lower and corporate debt markets seeing heightened activity, NTPC Green’s planned fundraising aligns with a broader wave of debt issuance. This surge has been fuelled by falling borrowing costs, as the RBI has implemented a 100-basis-point rate cut since February and infused liquidity.
NTPC Green Energy Limited, a subsidiary of NTPC Limited, is engaged in the business of power generation through non-conventional / renewable energy sources in all its aspects, whether wind, hydro, solar, tidal, geothermal, biomass, wave, waste, hybrid, or any other form, and production of green molecules and more.
Written by Shivani Singh
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