The bonds, valued at Rs 1 lakh per bond (with a minimum lot of 100 bonds), have a put/call option at the end of the seventh year and annually from the 10th year up to the 15th. Based on the private placement, secured non-convertible redeemable bonds have tax benefits under section 54EA/54 EB. The book-running lead arrangers to the issue were JM Financial and Kotak Mahindra. In spite of an A+ credit rating by Crisil, the company mobilised an access of Rs 75 crore at a coupon rate of 10.5 per cent on a half-yearly basis. This compares favourably with other PSUs which have raised tax-free bonds in the past, sources said.

For many years, the company planned to get long-term borrowing facility. "Because of the longer gestation period of the nuclear power plants, thecompany needed long-term loans," NPC chairman and managing director YSR Prasad said.

These power stations can be commissioned in around seven years and hence five to seven year bonds are not viable for the company. It is difficult to repay the debts before any revenue is generated, he added.

NPC is largely financed by the centre's outlay and also raises funds from the bond market through tax-free and taxable bonds. For the current year, the centre has sanctioned Rs 820 crore to NPC which will be used for new units at Tarapur and also for the ongoing projects.

The corporation, however, faces constraints in raising funds as it is engaged in nuclear power generation and can tap only the domestic market. Besides, NPC has little control in deciding tariff fixed by the Central Electricity Authority (CEA) and the newly set-up centre tariff regulatory commission henceforth.

NPC is setting up two units of 500 mw each at Tarapur where it already operates two stations of 160 mw each. The project cost of theproposed Tarapur Atomic Power Stations (TAPS) 3&4 is approximately Rs 4,500 crore based on the cost estimates of 1996. However, along with the interest during construction (IDC), the cost will be around Rs 6,400 crore. Both units, Tarapur 3 and 4, will cost around Rs 4,500 crore.

Construction of both units will begin simultaneously. The first is expected to be commissioned in around six and half years and the second a year after.

The company also plans to increase generation capacity to 20,000 mw by 2020 from its present installed capacity of about 2,000 mw. The proposed expansion will require around Rs 90,000 crore as per current estimates.