The Kerala Financial Corporation (KFC), a State public sector undertaking and leading financial institution, has hit BSE electronic bidding platform on Friday to raise ₹250 crore from the debt market by issuing non-SLR Bonds of ₹100 crore, with a greenshoe option of ₹150 crore, on private placement basis.
The bonds, rated AA (SO) by two Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) approved rating agencies with stable outlook for investment, would have a tenure of 10 years bearing a coupon rate payable semi-annually and be redeemable from the sixth year onwards.
“KFC has been issuing bonds since 2011 and this is the seventh launch. KFC is the only PSU under the State government and the only State Finance Corporation (SFC) raising funds without government guarantee. We are going to the market based on the strength of its financials,” said Tomin J. Thachankary, CMD of KFC who took over charge this week.
₹1,600 crore raised
The KFC has raised ₹1,600 crore so far from bond market in seven issues of which ₹415 crore has been redeemed so far.
Initially, the Corporation was raising bonds with State government guarantee, where the Corporation has to pay guarantee commission at 0.75% plus GST thereby increasing the cost further by 1%. Since 2016, the Corporation has been raising funds without government guarantee based on the strength of its balance sheet.
The Corporation aims to build the loan portfolio to a level of ₹4,000 crore by the end of this fiscal from the present ₹3,300 crore, said executive director Premnath Ravindranath. For this, he said the KFC would go for another bond issue by this year-end, if the present issue goes successful.
