NHPC Tax Free Bond- Product Note – Issue Opens on 18th October,2013

Here is a Product Note of Public Issue of Tax Free Bonds by National Hydroelectric Power Corporation.

 

IssuerNational Hydroelectric Power Corporation
Type of InstrumentTax free, secured, redeemable, non-convertible bonds in the nature of debentures

of face value of Rs. 1,000 each
Issue Sizefor an amount aggregating up to Rs. 500 crore with an option to retain

oversubscription up to Rs. 500 crore for issuance of additional bonds,
aggregating to a total of up to Rs. 1,000.00 crore*, during the Fiscal 2014
Credit Rating“[ICRA] AAA” by ICRA, IND ‘AAA (exp)’ by India Rating & Research

Private Limited & ‘CARE AAA’ by CARE
Mode of IssuePublic Issue
Frequency of Interest paymentAnnual
Tenor10 years, 15 years and 20 years from the deemed date of allotment
Face ValueRs.1000 per Bond
Minimum Application Size5 Bonds (Rs.5000) across all Series of Bonds
Issue Open DateOctober 18th , 2013
Issue Close DateNovember 11th , 2013
Lead ManagersA.K. Capital Services Limited & Axis Capital Limited


ISSUE DETAILS:

Options

Series of Bonds*

For Category I, II & III**

Series 1A

Series 2A

Series 3A

Coupon Rate (%) p.a.

8.18

8.54

8.67

Annualised Yield (%) p.a.

8.18

8.54

8.67

Options

For Category IV**

Series 1B

Series 2B

Series 3B

Coupon Rate (%) p.a.

8.43

8.79

8.92

Annualised Yield (%) p.a.

8.43

8.79

8.92

                                                                                          For Category I, II, III & IV**

Minimum Application

5 Bonds (Rs. 5000) (individually or collectively, across all Series)

In the multiple of

One Bond (Rs. 1000)



Tenor

10 years

15 years

20 years

Maturity / Redemption Date

10 years from the Deemed Date of Allotment

15 years from the Deemed Date of Allotment

20 years from the Deemed Date of Allotment

Redemption Amount (Rs./Bond)Repayment of the Face Value plus any interest at the applicable Coupon/ Interest Rate that may have accrued at the Redemption Date
Coupon/ Interest TypeFixed Coupon Rate
Coupon / Interest Payment DateThe date, in case of the first coupon/ interest payment shall be April 1, 2014 and for subsequent Fiscal Years the interest payment date shall be on April 1 of every Fiscal year. The last interest payment in each case will be made on the Redemption Date on prorata basis
Coupon/ Interest Reset ProcessNot applicable
Frequency of Coupon/ Interest PaymentAnnual

 

*The Company shall Allot Series 2A/ Series 2B (depending upon the category of applicants) to all valid applications, wherein the Applicants have not indicated their choice of the relevant Series of Bond.

**In pursuance of the CBDT Notification and for avoidance of doubt, it is clarified as under:

a.        The coupon rates indicated under Series 1B, Series 2B and Series 3B shall be payable only on the Portion of Bonds allotted to RIIs in the Issue. Such coupon is payable only if on the Record Date for payment of interest, the Bonds are held by investors falling under RII Category viz Category IV.

b.      In case the Bonds allotted against Series 1B, Series 2B and Series 3B are transferred by RIIs to Non-RIIs viz, QIBs, Corporates and/or High Networth Individuals, the coupon rate on such Bonds shall stand at par with coupon rate applicable on Series 1A, Series 2A and Series 3A respectively.

c.       If the Bonds allotted against Series 1B, Series 2B and Series 3B are sold/ transferred by the RIIs to investor(s) who fall under the RII category as on the Record Date for payment of interest, then the coupon rates on such Bonds shall remain unchanged;

d.      Bonds allotted against Series 1B, Series 2B and Series 3B shall continue to carry the specified coupon rate if on the Record Date for payment of interest, such Bonds are held by investors falling under RII Category;

e.       If on any Record Date, the original RII allotee(s)/ transferee(s) hold the Bonds under Series 1B, Series 2B and Series 3B for an aggregate face value amount of over Rs. 10 lakh, then the coupon rate applicable to such RII allottee(s)/transferee(s) on Bonds under Series 1B, Series 2B, Series 3B shall stand at par with coupon rate applicable on Series 1A, Series 2A, and Series 3A, respectively;

f.       Bonds allotted under Series 1A, Series 2A and Series 3A shall carry coupon rates indicated above till the respective maturity of Bonds irrespective of Category of holder(s) of such Bonds;

g.      For the purpose of classification and verification of status of the RII Category of Bondholders, the aggregate face value of Bonds held by the Bondholders in all the Series of Bonds, allotted under the respective Issue shall be clubbed and taken together on the basis of PAN.

 

 

QIB Portion

Corporate Portion

High Networth Individual Portion

Retail Individual Investor Portion

15% of the Overall Issue Size

20% of the Overall Issue Size

25% of the Overall Issue Size

40% of the Overall Issue Size

You may download its product note from here and 1 pager term sheet from here.






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