Saturday, April 4th, 2020

NTPC Becomes First PSU to Issue Bonus Debentures

CMD, NTPC  Arup Roy Choudhury ,Bonus Debenture Certificate by NTPC to Union Minister for Finance,Arun Jaitley, Piyush GoyalINVC NEWS
New Delhi, A replica of the Bonus Debentures Certificate of Rs 7725.76 crore was presented here today to the Union Finance Minister  Shri Arun Jaitley,  by Shri Piyush Goyal, Minister of Power, Coal and New & Renewable Energy in the presence of Shri P.K.Sinha, Secretary, Department of Power, Government of India, Dr. Arup Roy Choudhury, CMD, NTPC, Shri K. Biswal, Director (Finance), NTPC, Shri I. J. Kapoor, Director (Commercial),  NTPC,  Shri U. P. Pani, Director (Human Resources), NTPC, Shri S.C. Pandey, Director (Projects), NTPC and Shri K. K. Sharma, Director (Operations), NTPC among others. The Government of India receives 618.06 crore bonus debentures amounting to Rs. 7725.76 crore by virtue of its 74.96% shareholding in NTPC. In addition to the bonus debentures, the Government of India has also received Rs. 2060.75 crore as dividend distribution tax on the debentures. NTPC Ltd. has earlier issued, by way of bonus, one fully paid-up, secured debenture of Rs. 12.50 each, for every one fully paid-up equity share of Rs. 10 each held by its members. The issue size of the bonus debenture is of Rs 10306.83 crore and is also the biggest issue of its kind in the Country and also the first ever by any PSU. The Bonus Debentures carries the Coupon Rate of 8.49% p.a. payable annually and has been allotted. The need for issuing bonus debentures was felt sometime in July / August 2014. As on 30th March 2014, the company had free reserves of over Rs. 72000 crores and a cash balance of Rs. 15300 crore. Since the Company is in regulated generation business, there is little room for improvement of profitability. High net worth of around Rs. 85000 crore depresses ROE which works out to only around 12.78% on reported basis. Thus there was a need for capital optimization. Since Company has entered in its 40th year of incorporation, there was no better way to reward the shareholders than issuing Bonus debentures.

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