Thursday, December 7, 2023

REC to raise $300-$500 million in Yen-denominated green bonds

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Rural Electrification Corporation (REC) Ltd, a public sector enterprise under the Ministry of Power, plans to raise $300 million to $500 million in yen-denominated green bonds to fund its green loan portfolio, a senior company official said on Wednesday.”We plan to start roadshows in the second half of November to raise $300-500 million. The issuance will happen after that, depending on the response,” said Vivek Kumar Dewangan, chairman and managing director, REC Ltd, adding that the company expects the coupon rate to be in the range of 6% compared to the company’s overall borrowing cost of 7.23%.

The company is looking at the Japanese market as interest rates are lower as compared with U.S. dollar-denominated loans.By fiscal year 2030, the company is targetting to achieve a green finance loan book of Rs 3 lakh crore.

“The response in the non-deal roadshow was extremely good, and we expect that to be even better in the deal road shows that will happen in Tokyo, Hong Kong and London,” Dewangan added.

REC records highest quarterly PAT in Q2 on higher income

The company recorded its highest ever quarterly profit in the quarter ended September at Rs 3,773 crore, rising by more than a third year-on-year mainly on the back of higher income. Interest income on loan stood at Rs 11,213 crore, up 17.6% on year. Disbursements during the quarter came to Rs 41,598 crore, again, more than doubling from Rs 17,827 crore a year ago.

The non-banking financial company’s sanctions in the reporting quarter rose to Rs 1,04,366 crore as against Rs 84,889 crore, up 23%, of which, renewable sector constituted 24%.

“Owing to the improving asset quality, increase in lending rates and effective management of finance cost, REC is able to record its highest ever quarterly profit,” the company said.

The company targets to have net zero non-performing assets by the financial year 2025-26. The net credit-impaired assets ratio also called net non-performing assets ratio was 0.96% in the quarter compared with 1.24% a year ago.

The company’s loan book grew 20% to Rs 4.74 lakh crore as on September end as against Rs 3.94 lakh crore a year ago.

Finance cost of the company rose 28.3% year-on-year to Rs 7,350 crores mainly because of increase in loan disbursements, as per a company official.

The impact of the factors on the profit was mitigated by lower exchange losses and non-performing assets provisioning. Net transaction exchange loss fell almost 82% to Rs 81 crore.

Company officials said for the implementation of various infrastructure projects, REC has signed a memorandum of understanding (MoU) with Punjab National Bank for Rs 55,000 crore; with Bank of India for Rs 30,000 crore and also signed an MoU with SJVN for Rs 50,000 crore for setting up power generation projects based on conventional and renewable sources of energy.

This September, on the sidelines of the G20 Summit, REC said it held discussions with renewabe energy developers leading to signing of MoUs amounting to a total of around Rs 2.86 lakh crore.

The company’s scrip ended at Rs 282.85 crore, down 1.63% on the BSE, Wednesday. Benchmark Sensex ended 0.44% lower

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