Taking a cue from the Budget announcements on the infrastructure sector, power major NTPC Ltd has made a twin proposal to the government for allowing it to issue Rs 22,000 crore worth tax-free bonds and Rs 15,000 crore of long-term infrastructure bonds during the next six years, beginning 2011-12.
"We have written to the power ministry to allow us to raise funds to finance the company's huge capital expenditure plans for the next few years," a senior NTPC official said.
NTPC has projected its debt requirement at around Rs 31,000 crore per annum for the next six years.
The twin proposal will help broadbase NTPC's investor segment and reduce the cost of power resulting from lower coupons applicable to bonds raised compared to coupons applicable on regular bonds, the official said.
"Power sector being an integral part of infrastructure sector requires such measures and NTPC be allowed to issue tax-free bonds for meeting the debt requirement for its capex planned during the 11th and the 12th Plan periods," NTPC said in a letter to the power ministry.