Largest ever Bonus Debenture Issue of Rs 10307 crore by NTPC
27th Mar, 2015
NTPC Ltd. has issued, by way of bonus, one fully paid-up, secured debenture of Rs. 12.50 each, for every one fully paid-up equity share of Rs. 10 held by its shareholders. This is the largest ever Bonus Debenture Issue of Rs 10307 crore in India and the issue created the largest Debenture holders base of over 7 lakh investors thus adding depth to debt market.
In order to reward its shareholders in the 40th year of incorporation of the Company, it has been decided to issue Bonus debentures. The transaction was a unique capital restructuring exercise resulting in conversion of Rs. 10,306.83 crore from the free reserves of NTPC Ltd. into debentures. It offered a win-win situation for the Company and its shareholders by improving the gearing ratio and ROE of the Company and rewarding the shareholders with 8.49% fixed coupon bearing security, tradable at ease on NSE and BSE. The debentures are secured in nature and are rated Triple AAA by all the three rating agencies. The door-to-door maturity of debenture is 10 years and the instrument is redeemable in 8th, 9th and 10th year.These Bonus Debentures have been allotted on 25.03.2015 and in terms of the Scheme.
By virtue of 74.96% shareholding in NTPC, Government of India receives 618.06 crore bonus debentures amounting to Rs. 7725.76 crore. In addition, Govt. also received Rs. 2061 crore (approx.) as dividend distribution tax on these debentures.
In order to mark the historic occasion, a replica of the Certificate of Bonus Debenture was presented by CMD and other members of the Board of NTPC to the Hon’ble Minister of Finance, in the presence of Hon’ble Minister of Power on Thursday, 26th March, 2015.
The transaction was executed in shortest possible time of 93 days from Board Approval to Allotment as against 12 – 36 months taken by other issuers. Seamless co-ordination amongst Ministry of Power, Ministry of Corporate Affairs, Ministry of Finance and team NTPC could achieve this feat.
NTPC became the first PSU and First Maharatna to undertake such innovative capital restructuring exercise.
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