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NTPC Requests Bids From Banks, Financial Institutions To Raise 5,000 Cr Through Term Loans

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NTPC Requests Bids From Banks, Financial Institutions To Raise 5,000 Cr Through Term Loans
17 Aug 2022
6 min read

News Synopsis

State-run NTPC has requested bids from banks and financial institutions by August 31, 2022, with a goal of raising up to 5,000 crore through term loans. The company stated in its request for proposals (RFP) that the loan proceeds would be used for general corporate purposes, loan refinancing, takeover of projects, renewable energy projects, coal mining operations, renovation and modernization programmes for various projects, and general capital expenditures. 

"We thus solicit banks'/financial institutions' participation for the relevant RFP (RFP of up to 5,000 crore term loan)," it stated. According to the organisation, banks and financial institutions should give loans in multiples of 500 crores and at least 500 crores in size. The quoted rate of interest would be used to evaluate the bids. 

In accordance with the RFP document, "You are expected to propose the lowest rate of interest related to MCLR or linked to any other market determined external benchmark." It further stated that rating organisations like CRISIL, ICRA, CARE, and India Ratings have assigned the term loans of NTPC a AAA (Stable) grade. 

The corporation had also requested bids in May for a term loan of up to 5,000 crore for capital expenses related to ongoing or future projects to increase the capacity of energy generation. The company stated in its annual report for FY22 that it will ask shareholders for permission to raise up to $12,000 crore through the issuance of bonds or debentures on a private placement basis at its next annual general meeting on August 30. 

The NTPC chairman and managing director Gurdeep Singh stated that the company is concentrating on strengthening its base of existing companies while developing new business models in his letter to the shareholders in the annual report. NTPC also has a goal of reaching 75 GW of capacity by August 15 of the following year.