NHPC Tax Free Secured Redeemable Non-Convertible Bonds

Public Issue of Tax Free Secured Redeemable Non-Convertible Bonds to be issued by “NHPC Limited”(NHPC).

 Issue is opening on Friday, 18^th October 2013 and closes on Monday, 11^th November 2013^.

^The Issue may close on such earlier date or extended date as may be decided by the company. 

 NHPC Ltd                               Company Profile

NHPC Limited (NHPC) is a Mini Ratna Category-I hydroelectric power generating company dedicated to the planning, development and implementation of an integrated and efficient network of hydroelectric power projects in India.

Salient features of the BOND Issue – Tranche - I

The Bonds are issued in the form of tax-free, secured, redeemable, non-convertible bonds and the interest on the Bonds will not form part of the total income as per provisions u/s. 10 (15) (iv) (h) of I.T. Act, 1961.

l  Credit rating agency ICRA has rated the Bonds under this offer as “ICRA AAA” and IRRPL has rated the Bonds as “IND AAA” and CARE has rated the Bonds as “CARE AAA”.Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

l  The Bonds bear an attractive coupon rate; 8.18% p.a. for 10 Years, 8.54% for 15 Years and 8.67% for 20 Years for Category I, II, III applicants and

l  For Category IV applicants (RII) coupon rate; 8.43% p.a. for 10 Years, 8.79% for 15 Years and 8.92% for 20 Years.

l  The Bonds issued by the Company will be secured by pari passu first charge on specific assets of the Company with an asset cover of one time of the total outstanding amount of Bonds. The Company reserves the right to create first pari passu charge on the said specific project assets for its present and future financial requirements or otherwise, without requiring the consent of, or intimation to, the Bondholders or the Bond Trustee in this connection, provided that a minimum security cover of 1 (one) times is maintained.  The Company shall create DRR of 25% of the value of Bonds issued & allotted for the redemption of the Bonds.

l  The Company shall pay interest on application money on the amount allotted to the applicants other than ASBA Applicants, Same as the Coupon Rate and Interest on application money which is liable to be refunded to applicants at the rate of 5.00%p.a.,subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended.

l  Allotments of Bonds in this Issue will be on a first come-first serve basis, on the basis of the date of upload of Applications on the online platform of the Stock Exchange,

l  Allotment of Bonds can be in both dematerialised and physical form.

l   The bonds will be listed on BSE and NSE.

��

-->

Category of investors

Particulars	Category I	Category II	Category III	Category IV
	(“Qualified Institutional Buyers”) (“QIBs”)*	(“Corporates”) *	(“High Networth Individuals”) (“HNIs”)	(“Retail Individual Investors”) (“RIIs”)*
Reservation for each category	Up to 15% of issue size	Up to 20% of issue size	Up to 25% of issue size	Up to 40% of  issue size
	Rs.150 cr for allotment to QIB Portion assuming Issue size of  Rs.1,000 cr	Rs.200 cr for allotment to Corporates Portion assuming Issue size of Rs.1,000 cr	Rs. 250 cr for allotment to HNIs Portion assuming Issue size of Rs.1,000 cr	Rs.400 cr for allotment to RIIs Portion assuming Issue size of Rs.1,000 cr
Who can Apply	·    Public financial institutions as defined  in Section 4A of the Companies Act, as amended, ·    Indian Alternative Investment Funds eligible to invest under the SEBI ·    Scheduled commercial banks, ·    Mutual funds registered with SEBI, ·    State industrial development corporations, ·    Insurance companies registered with the Insurance Regulatory and Development Authority, ·    Provident funds with a minimum corpus of Rs. 25 crore, ·    Pension funds with a minimum corpus of Rs. 25 crore, ·    The National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of the GoI, published in the Gazette of India, ·    Insurance funds set up and managed by the army, navy, or air force of the Union of India, and ·    Insurance funds set up and managed by the Department of Posts, India which is authorized to invest in Bonds.	·    Companies within the meaning of section 2(20) of the Companies Act, 2013, ·    Limited Liability Partner-ships registered under the provisions of the LLP Act, ·    Statutory corporations, ·    Trust, ·    Partnership firms in the name of partners, ·    Cooperative banks, ·    Regional Rural Banks, ·    Societies registered under the applicable laws in India, ·    Association of Persons, and ·    Other domestic legal entities  registered under applicable laws in India and authorised to invest in Bonds.	The following investors applying for an amount aggregating to more than Rs.10 lakh across all Series of Bonds in the Issue : ·    ResidentIndividual Investors ·    Hindu Undivided Families applying through the Karta	The following investors applying for an amount aggregating up to and including Rs.10 lakh across all Series of Bonds in the Issue : ·    Resident Individual Investors ·    Hindu Undivided Families applying through the Karta
* With regard to Section 372A(3) of the Companies Act, 1956, kindly refer to General Circular No. 6/ 2013, dated March 14, 2013 Ministry of Corporate Affairs, GoI clarifying that in cases where the effective yield on tax free bonds is greater than the prevailing bank rate, there shall be no violation of Section 372A(3) of the Companies Act, 1956

Who cannot apply

×     Minors without a guardian name.* A guardian may apply on behalf of a minor. However, Applications by minors must be made through Application Forms that contain the names of both the minor Applicant and the guardian; ×     Persons Resident Outside India and Foreign nationals (including Non-resident Indians, Foreign Institutional Investors and Qualified Foreign Investors); ×     Venture Capital Fund and Foreign Venture Capital Investor; ×     Overseas Corporate Bodies; and ×     Person ineligible to contract under applicable statutory/regulatory requirements. ×     Any other category of investors not mentioned in Category I, II, III and IV above. * Applicant shall ensure that guardians competent to contract under Indian Contract Act 1972.

Investment Options:

Options	Series 1		Series 2			Series 3
Interest Payment	Annual			Annual			Annual
Face Value of Bonds	Rs. 1,000
Tenor	10 Years			15 Years			20 Years
Minimum Application	Rs. 5,000/-  ( 5 Bonds) across all the series
In Multiple of	Rs.1,000 ( 1 BOND )
Put /Call Option	There is no put/call option for the Bonds
Options/Series of Bonds	Series 1 A	Series 1 B		Series 2 A	Series 2 B		Series 3 A	Series 3 B
Coupon Rate/Annulised Yield   for Category I, II & III Applicants (% p.a.)	8.18%	--		8.54%	--		8.67%	--
Coupon Rate/Annulised Yield   for Category IV Applicants (% p.a.)	--	8.43%		--	8.79%		--	8.92%
Interest payment Date	The date, in case of the first coupon/ interest payment shall be April 1, 2014 and for subsequent Fiscal Years the interest payment date shall be on April 1 of every Fiscal year. The last interest payment will be made at the of Redemption Date of the bonds on prorata basis
Redemption  Amount	Repayment of the Face Value plus any interest at the applicable Coupon/ Interest Rate that may have accrued at the Redemption Date
Default Interest Rate	The Company shall pay liquidated damages at a compounded rate of 1% per annum on the amount in respect of which a default has been committed in the event the Company fails to pay any amounts outstanding payable, when due and payable.
Security	A pari passu first charge on specific assets  of the Company,  as may be mentioned in the Bond Trust Deed, with an asset cover of one time of the total outstanding amount of Bonds. The Company reserves the right to create first pari passu charge on the said specific project assets for its present and future financial requirements or otherwise, without requiring the consent of, or intimation to, the Bondholders or the Bond Trustee in this connection, provided that a minimum security cover of 1 (one) times is maintained.
Security Cover	One time of the total outstanding Bonds.
Nature of Indebtedness and Ranking / Seniority	The claims of the Bondholders shall be superior to the claims of any unsecured creditors of the Company and subject to applicable statutory and/or regulatory requirements, rank pari passu inter se to the claims of other secured creditors of the Company having the same security
Note: In pursuance of CBDT Notification and for avoidance of doubts, it is clarified as under: a.     The coupon rates indicated under the Prospectus  shall be payable only on the Portion of Bonds allotted to RIIs in the Issue. Such coupon is payable only if on the Record Date for payment of interest, the Bonds are held by investors falling under RIIs Category viz Category IV. b.     In case the Bonds allotted against the Prospectus are transferred by RIIs to Non-RIIs(as on Record Date) viz, Qualified Institutional Buyers, Domestic Corporates and/or High Networth Individuals, the coupon rate on such Bonds shall stand at par with coupon rate applicable to respective category of investors. c.     If the Bonds allotted against the Prospectus are sold/ transferred by the RIIs to investor(s) who fall under the RIIs category as on the Record Date for payment of interest, then the coupon rates on such Bonds shall remain unchanged; d.     Bonds allotted against the Prospectus shall continue to carry the specified coupon rate if on the Record Date for payment of interest, such Bonds are held by investors falling under RII Category; e.     If on any Record Date, the original RII allotee(s)/ transferee(s) hold the Bonds under the Prospectus for an aggregate face value amount of over Rs. 10 Lakh, then the coupon rate applicable to such RII allottee(s)/transferee(s) on Bonds under the Prospectus shall stand at par with coupon rate applicable to Non-RIIs. f.      Bonds allotted under the Prospectus shall carry coupon rates indicated above till the respective maturity of Bonds irrespective of Category of holder(s) of such Bonds; g.     For the purpose of classification and verification of status of the RII Category of Bondholders, the aggregate face value of Bonds held by the Bondholders in all the Series of Bonds, allotted under the respective Tranche Issue shall be clubbed and taken together on the basis of PAN of the 1st holder.

-- 

Thanks & Regards,