Maharatna CPSE, REC Ltd raises Rs 2,195 crore through bonds of different maturities

State-owned Rural Electrification Corporation Ltd has successfully raised Rs 2,195 crore through bonds with varying maturities. The firm secured Rs 575 crore through 15-year bonds at a coupon rate of 7.14 percent. Additionally, it raised Rs 1,620 crore through bonds maturing in 10 years and four months at a rate of 7.10 percent. Initially, REC aimed to raise Rs 2,500 crore via 15-year bonds, with a basic issuance amount of Rs 500 crore and a greenshoe option of Rs 2,000 crore.

The company also sought to raise Rs 4,000 crore through 10-year bonds, which had a basic issue of Rs 700 crore and a greenshoe option of Rs 3,300 crore.

Market participants noted that the full target amount was not raised due to investors seeking higher coupon rates. "They were expecting around 7.12-7.13 percent for the 15-year bonds, which is why they only achieved the basic amount," commented a dealer.

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Previously in November, the company had raised Rs 3,000 crore through the issuance of 15-year bonds at a tight pricing of 7.09 percent. This marked the first long-tenure (10 years and above) bond issuance by a ‘AAA-rated entity in some time, signaling strong demand from long-term investors, including insurance companies and pension funds.

Separately, the National Housing Bank raised Rs 3,900 crore at 7.20 percent through bonds maturing in 82 months. The company was looking to raise Rs 4,000 crore. The issuance had a basic issue size of Rs 1000 crore, with a greenshoe option worth Rs 3,000 crore. 

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