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Rural Electrification Corporation Limited
Issue Highlights:
| Issue Opens | Friday, August 30, 2013 | Minimum Application | 5 Bonds (Rs. 5,000) across all series of Bonds |
| Issue Closes | Monday September 23, 2013 | Coupon Rate(Retail) | 8.26% p.a for 10 years - Annually 8.71% p.a for 15 years - Annually 8.62% p.a for 20 years - Annually |
| Issue Price | Rs. 1000/- per Bond | Credit Ratings | "CRISIL AAA/Stable" by CRISIL, "CARE AAA" by CARE, "[ICRA] AAA" by ICRA |
Business Overview:
Rural Electrification Corporation Ltd. (REC) is a public financial institution in the Indian power infrastructure sector, engaged in the financing and promotion of transmission, distribution and generation including renewable energy projects throughout India.
It occupies a key position in the Government of India’s (GoI) plans for the growth of the Indian power sector. It assists clients in formulating and implementing a broad array of power projects and finances those projects.
It commenced its operations in 1969 for the purpose of developing the power infrastructure in rural area and has contributed to the development of rural India and India's agriculture through funding of transmission and distribution projects in rural areas. It has evolved in accordance with the development priorities of the GoI and, since Fiscal 2003, permits them to finance all segments of the power sector, including generation, transmission and distribution, throughout the country.
REC is one of only 14 Indian public sector undertakings to have granted the “Navratna” status by the Department of Public Enterprise by virtue of our operational efficiency and financial strength. The GoI has rated our performance as “Excellent” continuously since Fiscal 1994.
It has been ranked among the top ten public sector undertakings in India by the Ministry of Heavy Industries and Public Enterprises for Fiscal 2000, Fiscal 2001, Fiscal 2002, Fiscal 2004 and Fiscal 2005.
Issue Highlights:
| Issue Opens | Friday, August 30, 2013 |
| Issue Closes | Monday September 23, 2013 |
| Issue Price | Rs. 1000/- per Bond |
| Face Value | Rs. 1000/- per Bond |
| Minimum Application | 5 Bonds (Rs. 5,000) across all series of Bonds |
| Rating | "CRISIL AAA/Stable" by CRISIL, "CARE AAA" by CARE, "[ICRA] AAA" by ICRA , "IND AAA" by IRRPL |
| Face Value | Rs. 1000/- per Bond |
| Listing On | BSE |
| Registrar | Karvy Computershare Private Limited |
| Coupon Rate (Retail - Category IV) |
8.26% p.a for 10 years - Annually 8.71% p.a for 15 years - Annually 8.62% p.a for 20 years - Annually |
| Coupon Rate (Non Retail - Category I, II and III) |
8.01% p.a for 10 years - Annually 8.46% p.a for 15 years - Annually 8.37% p.a for 20 years - Annually |
Allotment is on First Come First Serve Basis
Specific terms for each series of Bonds
| Options | Series I  |
Series II |
Series III |
| Frequency of Interest Payment | Annually | Annually | Annually |
| Minimum Application | 5 Bonds (Rs. 5,000) across all series of Bonds | ||
| In Multiples of | Rs. 1,000/- (1 Bond) | ||
| Face Value of Bonds (Rs. / Bond) | Rs. 1,000/- per Bond | ||
| Issue Price (Rs. / Bond) | Rs. 1,000/- per Bond | ||
| Coupon rate (%) p.a. for Category I, II, and III | 8.01% | 8.46% | 8.37% |
| Annualized yield(%) p.a. for Category I, II and III | 8.01% | 8.46% | 8.37% |
| Coupon Rate (%)per annum for Category IV | 8.26% | 8.71% | 8.62% |
| Annualized yield(%) p.a. for Category IV | 8.26% | 8.71% | 8.62% |
| Tenor | 10 Years | 15 Years | 20 Years |
| 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 |
* The Company shall allocate and allot Tranche 1 Series 1A/ Series 1B (depending upon the category of applicants) to all valid applications, wherein the Applicants have not indicated their choice of the relevant Series of Bond.
Salient features of the issue
| Issuer | Rural Electrification Corporation Limited |
| Issue Size | Rs. 1,000 Crs. with an option to retain oversubscription of Rs. 2500 Crs. aggregating upto Rs. 3500 Crs. |
| Issue of Bonds | Public Issue by Rural Electrification Corporation Limited ("REC" or "Issuer" or the "Company") of Tax Free Secured Redeemable Non Convertible Bonds of Face Value of Rs. 1,000 each in the nature of debentures having tax benefits under Section 10 (15)(iv)(h) of the Income Tax Act, 1961, as amended ("Bonds") for an amount aggregating upto the Shelf Limit. |
| Nature of Instrument | Secured |
| Credit Ratings | "CRISIL AAA/Stable" by CRISIL, "CARE AAA" by CARE, "[ICRA] AAA" by ICRA, "IND AAA" by IRRPL |
| Interest Payment Date | December 1, of every year |
| Security | The Bonds issued by the Company will be secured by way of first / pari passu charge on the book debts of the Company, other than those that are exclusively charged/earmarked to any trustee/lender(s) of the Company, and/or any other security as may be agreed between the Company and the Trustee, pursuant to the terms of the Bond Trust cum Hypothecation Deed with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. |
| Mode of allotment | In dematerialised form to all Applicants and in physical form, at the option of Applicants other than QFIs. |
| Trading Mode | In dematerialised form only |
| Issue opening date | Friday, August 30, 2013 |
| Issue closing date | Monday, September 23, 2013 |
| Record Date | The record date for the payment of interest or the Maturity Amount shall be 15 days prior to the date on which such amount is due and payable. In the event the Record Date falls on a Saturday, Sunday or a Public Holiday in New Delhi or any other payment centre notified in terms of the Negotiable Instruments Act, 1881, the succeeding Working Day shall be considered as the Record Date. |
| Deemed Date of Allotment | The date on which the Board of Directors or Bond Committee approves the Allotment of the Bonds for each Tranche Issue or such date as may be determined by the Board of Directors or Bond Committee and notified to the Stock Exchange. All benefits relating to the Bonds including interest on Bonds (as specified for each tranche by way of Tranche Prospectus) shall be available to the Bondholders from the Deemed Date of Allotment. The actual Allotment of Bonds may take place on a date other than the Deemed Date of Allotment. |
| Nature of Indebtedness and Ranking/ Seniority | The claims of the Bondholders shall be superior to the claims of any unsecured creditors of the Company and subject to applicable statutory and/or regulatory requirements, rank pari passu with other secured creditors having a first pari passu charge on the book debts of the Company that are charged as Security under this Issue. |
* With regard to Section 372A(3) of the Companies Act, 1956, kindly refer to General Circular No. 6/ 2013, dated March 14th, 2013 Ministry of Corporate Affairs, GoI clarifying that in cases where the effective yield on tax free bonds is greater than the prevailing bank rate, there shall be no violation of Section 372A(3) of the Companies Act, 1956. Participation by any of the above-mentioned Investor classes in this Issue will be subject to applicable statutory and/or regulatory requirements. Applicants are advised to ensure that Applications made by them do not exceed the investment limits or maximum number of Bonds that can be held by them under applicable statutory and/or regulatory provisions.
^ The Company will make public issue of the Bonds in the dematerialised form to all Applicants and in physical form to Applicants other than QFIs. However, in terms of Section 8 (1) of the Depositories Act, the Company, at the request of the Investors who wish to hold the Bonds in physical form will fulfill such request. However, trading in Bonds shall be compulsorily in dematerialized form.
Who Can Apply
| Categories | Reservation for Categories | Basis of allocation incase of over subscription | |
| Category I: (Institutional) |
|
20% of Overall Issue Size | On first-come-first-serve basis |
| Category II: (Corporate) |
* With regard to Section 372A(3) of the Companies Act, 1956, kindly refer to General Circular No. 6/ 2013, dated March 14th, 2013 Ministry of Corporate Affairs, GoI clarifying that in cases where the effective yield on tax free bonds is greater than the prevailing bank rate, there shall be no violation of Section 372A(3) of the Companies Act, 1956. |
20% of Overall Issue Size | On first-come-first-serve basis |
| Category III: (HNI) |
The following investors applying for an amount aggregating to above Rs. 10 lakhs across all Series of Bonds in each Tranche - I Issue:
|
20% of Overall Issue Size | On first-come-first-serve basis |
| Category IV: (Retail) |
The following investors applying for an amount aggregating upto and including Rs. 10 lakhs across all Series of Bonds in each Tranche Issue:
|
40% of Overall Issue Size | On first-come-first-serve basis |
4 Easy Ways to Apply
Apply on Website
- Login to Edelweiss.in >> Trade
- Click on 'IPO' tab
- Click on Order IPO
- Click on Apply button next to the REC Bond option you wish to apply.
- Enter relevant details like quantity and price and hit the 'Submit' button.
- Post your confirmation, order will be placed successfully
Use Xtreme Trader
- Login to Xtreme Trader
- Click on Weblinks on the top menu bar
- Click on 'IPO'
- Click on Order IPO
- Click on Apply button next to the REC Bond option you wish to apply.
- Enter relevant details like quantity and price and hit the 'Submit' button.
- Post your confirmation, order will be placed successfully
Use the Mobile Trader App
- Login to Edelweiss Mobile Trader
- Tap on 'IPO' button at the bottom of the App
- Tap on the "REC Bond Issue", and hit the "Apply" button
- Enter relevant details like quantity and price and hit the 'Submit' button
- Post your confirmation, order will be placed successfully
Call Customer Care to Apply
- Call up 1800-102-333-5
- Select your preferred language: Press 1 for English or 2 for Hindi
- Press 1 to confirm that you are an existing account holder
- Press 5 to apply in IPO
- Speak to the customer care executive and provide the REC Option you wish to apply along with Quantity and Price.
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