| PUBLIC ISSUE OF TAX FREE BONDS |
| HIGHLIGHTS OF THE BOND ISSUE |
| Issuer | Power Finance Corporation Ltd. (“PFC”/ “Company”/ “Corporation”) |
| Issue Opening Date | 30/12/2011 |
| Issue Closing Date | 16/01/2012 |
| The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and close at the close of banking hours, with an option for early closure (subject to the Issue being open for a minimum of 3 days) or extension by such period, upto a period of 30 days from the date of opening of the Issue, as may be decided by the Board of Directors/ Committee of PFC. In the event of such early closure of the subscription list of the Issue, our company shall ensure that public notice of such early closure is published on or before the day of such early date of closure through advertisement(s) in a leading national daily newspaper. |
| Instrument | Tax Free Secured Redeemable Non Convertible Bonds in the nature of Debentures |
| Issue Size | Rs. 1,000 crores with an option to retain an oversubscription upto the Shelf Limit of Rs. 4033.13 crores |
| Tax Benefits | 1. The income by way of interest on these Bonds shall not form part of total income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961;
2. There shall be no deduction of tax at source from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors;
3. As per section 112 of the IT Act, capital gains arising on the transfer of long term capital assets being listed securities are subject to tax at the rate of 20% of capital gains calculated after reducing indexed cost of acquisition or 10% of capital gains without indexation of the cost of acquisition;
4. Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957.
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| Instrument Form | At the option of investors, in dematerialized form and in physical form |
| Trading | Only in dematerialized form |
| Security | Charge on the book debts of the Issuer and/or identified immovable property by a first/ pari passu charge, as may be agreed between the Issuer and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed |
| Credit Rating | “CRISIL AAA/Stable” by CRISIL and “[ICRA] AAA” by ICRA |
| Face Value | Rs. 1,000/- per Bond |
| Issue Price | At par i.e. Rs. 1,000/- per Bond |
| Minimum Application | 10 Bonds (Rs. 10,000/-) and in multiples of 5 Bonds (Rs. 5,000/-) thereafter |
| Tranche/ Series | Tranche-I Series-I | Tranche-I Series-II |
| Tenor | 10 Years | 15 Years |
| Put & Call Option | None | None |
| Maturity/ Redemption | At par on the expiry of 10th Year from the Deemed Date of Allotment | At par on the expiry of 15th Year from the Deemed Date of Allotment |
| Coupon Rate | 8.20% p.a. | 8.30% p.a. |
| Interest Payment | Annual | Annual |
| Interest Payment Dates | Every year on October 15, and on respective maturity |
| Listing | Proposed on BSE Ltd. (“BSE”) |
| Trustee | GDA Trustee & Consultancy Ltd. |
| Deemed Date of Allotment | The date on which the Directors of the Company or any committee thereof approves the Allotment of the Bonds. All benefits relating to the Bonds including interest on Bonds shall be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment |
| Record Date | 15 days prior to the due date for payment of interest or repayment of principal amount on maturity. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the record date and the date of redemption |
| Issue Objects | The proceeds of the Issue shall be utilised towards lending purposes, debt servicing and working capital requirements of the Issuer |
| Interest on Application Money | At the respective coupon rate (subject to deduction of income tax under the provisions of IT Act, 1961, as applicable), to the applicants to whom Bonds are allotted pursuant to the Issue from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of banking of the application (being the date of submission of each application as duly acknowledged by the Bankers to the Issue) whichever is later upto one day prior to the Deemed Date of Allotment.
At the rate of 5% p.a. (subject to deduction of income tax under the provisions of the IT Act, 1961, as applicable) to the applicants to whom application monies are liable to be refunded the along with refund amount from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of receipt of the application (being the date of presentation of each application as acknowledged by the Bankers to the Issue) whichever is later upto one day prior to the Deemed Date of Allotment.
PFC shall not be liable to pay any interest on monies liable to be refunded in case of (a) invalid applications or applications liable to be rejected, and/or (b) applications which are withdrawn by the applicant.
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| Nature of Indebtedness and Ranking | The claims of the Bondholders shall rank pari passu with other secured creditors having a charge over the on the book debts of the company and/or identified immovable property as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed and such claims shall be superior to the claims of any unsecured creditors |
| Lead Managers to the Issue | SBI Capital Markets Ltd., A.K. Capital Services Ltd. and RR Investors Capital Services (P) Ltd. |
| Bankers to the Issue | (i) State Bank of India, (ii) HDFC Bank Ltd., (iii) IDBI Bank Ltd., (iv) ICICI Bank Ltd. (v) Kotak Mahindra Bank Ltd., (vi) Axis Bank Ltd., (vii) Dhanlaxmi Bank Ltd., and (viii) IndusInd Bank Ltd. |
| Base Issue Size | Rs. 1,000 crore |
| Overall Issue Size | The aggregate value of Bonds decided to be allotted in the Issue (over and above the Base Issue Size, in case if PFC decides to retain any oversubscription in the Issue) |
| Reservation for Categories | On first-come-first-serve basis |
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