New Delhi: NTPC, the state owned thermal power giant issued bonus debentures worth Rs 10,306.83 crore – the largest ever by any Indian company. It is also the first public sector company to adopt this innovative instrument to reward the shareholders, said the company’s executives.
After the shareholders’ approval for the scheme of arrangement to issue bonus debentures, the ministry of corporate affairs (MCA) approved NTPC’s scheme to reward its shareholders by issuing Secured Bonus Debentures of face value Rs 12.50 each for every one equity share of Rs 10 each. The final order of the MCA was received on 11.03.2015.
In December last year, the board of state-run NTPC had approved a scheme of arrangement for the issuance of secured, non-cumulative, non-convertible, redeemable, taxable fully paid-up bonus debentures of face value of Rs 12.50 each against each equity shares of Rs 10 held by its members by utilising its free reserves.
The company proposes to list it the debentures on BSE and NSE – providing flexibility to shareholders to monetize the security at any point of time during the life of the debenture, informed NTPC.
NTPC stocks jumped to a 52 week high post the announcement of debentures. At 11:42 hours, the stock was up 5 per cent at Rs 162 and has seen a combined 13.75 million shares changed hands on the counter on NSE and BSE.
The debentures will be redeemed at the end of 8th, 9th and 10th year in the ratio of 20 per cent, 40 per cent and 40 per cent of the face value respectively. “Thus the reward does not entail an immediate cash outflow for the company,” said the senior executive of NTPC.
