New Delhi: REC Limited has successfully raised Rs 5,000 crore through CBDT-notified Zero Coupon Bonds (ZCBs) with an effective yield of 6.25 percent per annum. The bond issuance was met with strong demand, being oversubscribed seven times its original size.
These ZCBs, issued at a deep discount and redeemed at face value, offer tax benefits to investors due to their CBDT notification. When the bonds mature, the redemption is classified as long-term capital gains, subject to a lower tax rate of 12.5 percent per annum.
All four major credit rating agencies—CARE, CRISIL, ICAR, and IRRPL—assigned a top rating of AAA to the issuance. The last such issuance by REC was in the financial year 2010-11.
The bonds, with a net pay-in of Rs 2,712.50 crore, are scheduled for settlement on September 3, 2024, and will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
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