NEW DELHI, May 1: The Rs 74-crore private placement from Konkan Railway Corporation, which opened on Friday, is likely to mop up the target amount by tomorrow. Konkan Railway Corporation Limited (KRCL) proposes to raise the aforesaid amount through the issue of non-convertible secured redeemable bonds of the face value of Rs 1 lakh each by way of private placement. The Crisil AAA (SO)-rated bonds will carry a coupon rate of 13 per cent payable semi-annually on January 1 and July 1.The drop in the interest rates after the announcement of the slack season credit policy has made the Konkan Railway's bonds all the more attractive.The bonds will have a maturity period of seven years from the deemed date of allotment. The bonds, to be redeemed at par on maturity, will also have the call and put option which can be exercised after the expiry of five years. The bondholder will have the option to `put' the bonds, that is, get them redeemed at par after the expiry of five years from the date of allotment. KonkanRailway will also have the option to `call' the entire amount of bonds or part thereof, that is, redeem them at par after the expiry of five years of allotment.
Probably for the first time, a sole mandate has been awarded to an arranger for any government of India undertaking AAA-rated issue. Konkan Railway Corporation has appointed RR Financial Consultants as the sole arranger and advisor to the Rs 73.5-crore private placement of bonds.
Konkan Railway also proposes to make an application to the National Stock Exchange (NSE) for listing of bonds with a marketable lot of one bond.According to market sources, although the issue, which opened for subscription on May 1, is open till May 27, it is likely to mop up the required amount in the first few days itself. Konkan Railway has fixed the deemed date of allotment on May 27.The funds raised would be used by Konkan Railway to meet the balance requirement of funds for its otherwise commissioned project.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
