UDAY bond to raise Rs 1,564 crore

Rajasthan government to issue bonds worth Rs 1,564 crore under the Ujwal DISCOM Assurance Yojana (UDAY) on February 6, 2017. Reportedly, RBI will hold sole discretion to accept or reject any or all bids made for this bond.

The eligible market participants who are interested in subscribing to these securities can send their bids via e-mail, in accordance with the specified format, between 10:30 am to 12:00 noon on February 6.

The securities will have a face value of Rs 100, for which, a minimum bid size of Rs 100 crore will be accepted for bidding. The securities will be issued in equal strips with a maturity, at the end of 2nd year till 10th year and a uniform spread offered by the bidder will be added, with cap of 75 bps over fixed income money market and derivatives association of India (FIMMDA), to conclude the coupon amount to be paid on semi-annual basis.

The scheme UDAY was introduced by the Ministry of Power on November 20, 2015 for the financial turnaround and revival package to reach to a permanent solution to the disturbed financial ecosystem of electricity distribution companies of India (DISCOMs).

Similar bonds were already issued by eight different states to raise Rs 98,959.97 crore in 2015-16 under the UDAY program.