Power Grid Corporation, one of India’s leading power transmission companies, is set to raise Rs 5,700 crore through the issuance of bonds in the fiscal year 2023-24. The decision was approved by the company’s board and is aimed at meeting its capital expenditure requirements for expansion and development projects.
The funds will be raised through private placement of bonds, and the issuance will be carried out in multiple tranches. This approach allows the company to raise funds from institutional investors and other qualified buyers.
The main focus of raising these funds is to meet the company’s capital expenditure needs, which are crucial for its growth and development plans. Additionally, a portion of the funds will be allocated to provide inter-corporate loans to Power Grid Corporation’s wholly-owned subsidiaries and joint ventures, further supporting their operations and initiatives.
The company plans to secure the cash flows of four operational special purpose vehicles (SPVs) until March 2034 as a means to ensure the timely repayment of the bonds. These SPVs include POWERGRID Bhuj Transmission, POWERGRID Khetri Transmission System, POWERGRID Medinipur Jeerat Transmission System, and POWERGRID Varanasi Transmission System.
In the first tranche, Power Grid will raise Rs 500 crore, and it has the flexibility to exercise a green shoe option to raise an additional Rs 1,400 crore if the need arises. This approach provides the company with the flexibility to raise more funds if the demand from investors is higher than anticipated.
Power Grid Corporation’s decision to raise funds through bond issuance demonstrates its commitment to expanding its infrastructure and meeting the growing energy demands in the country. By securing funds through this method, the company can strengthen its financial position and continue its efforts to enhance the power transmission network in India.
As the power sector continues to play a crucial role in India’s economic growth and development, Power Grid Corporation’s initiatives to raise funds for expansion will contribute to the overall progress and stability of the nation’s energy infrastructure.
