NHPC, HDFC Bank signs Agreement for Securitization of Return on Equity

by Psu Connect
Date: 25-02-22

Under the process, the ownership of the asset remains with the company while the company is able to raise resources for meeting out CAPEX target which is the main objective of NMP.

NHPC, HDFC Bank signs Agreement for Securitization of Return on Equity

The agreement was signed in the presence of Sh A.K. Singh, Chairman and Managing Director, NHPC, and Shri R.P. Goyal, Director (Finance), NHPC.

New Delhi: National Hydroelectric Power Corporation (NHPC) signed an Agreement with Private Lender, HDFC Bank under the ambit of National Monetization Pipeline (NMP), for Securitization of Return on Equity for NHPC Chamera-l Power Station (H.P.) on 24.02.2022. The agreement was signed in the presence of Sh A.K. Singh, Chairman and Managing Director, NHPC, and Shri R.P. Goyal, Director (Finance), NHPC.

The monetization deal has been closed at a discounting factor of 5.24% p.a linked with 3M T-Bills which has fetched a present value of Rs.1016.39 crore against the future cash flow of 10 years for Chamera-l Power Station. The monetization through securitization of future cash flow is one of the most tax-efficient, economical, and faster modes of asset monetization.

Under the process, the ownership of the asset remains with the company while the company is able to raise resources for meeting out CAPEX target which is the main objective of NMP.