NHPC, NTPC Green Line Up Major Bond Issues Worth Rs 4,500 Crore
- NHPC and NTPC Green Energy aim to raise Rs 4,500 crore through short-term bonds this month to leverage lower yields.
- NHPC to issue Rs 2,000 crore in 2-3 year bonds, while NTPC Green makes its bond market debut with a Rs 2,000 - 2,500 crore five-year issuance.
- Firms prefer short-term tenors due to favorable interest rate spreads and expectations of increased bond demand post-RBI policy.
Indian state-run power firms NHPC and NTPC Green Energy are set to raise a combined Rs 4,500 crore (approximately $512.6 million) through the issuance of short-term bonds this month, according to three sources familiar with the matter.
Hydropower major NHPC plans to raise around Rs 2,000 crore through two-year or three-year bonds and is expected to launch the issue ahead of NTPC Green Energy. The move follows NHPC’s previous fundraising in May, where it secured Rs 1,945 crore via long-term STRPP (Separately Transferable Redeemable Principal Part) bonds with maturities ranging from six to 15 years.
Meanwhile, NTPC Green Energy, a subsidiary of the integrated power producer NTPC, will make its debut in the bond market by raising between â¹2,000 crore and Rs 2,500 crore through five-year bonds. While the company is inclined towards issuing shorter-duration papers, it may also consider 10-year notes depending on investor interest, one source noted.
Both companies have yet to respond to requests for comment.
Industry experts highlight that shorter-term interest rates are currently lower, offering attractive spreads between three-to-five-year and 10-year tenors. This has motivated issuers to favor short-term papers.
Bond market participants expect yields on shorter-term bonds to ease further, especially as the Reserve Bank of India’s upcoming monetary policy decision is anticipated to support demand in the debt market.
