The state-run organisation, currently facing a financial crunch due to debts worth more than Rs. 1,00,000 crore, is planning to raise Rs. 8,000 crore through a bond issue in the current fiscal year.
The Food Corporation of India (FCI) is planning to raise Rs. 8,000 crore through a bond issue in the current fiscal to improve its working capital.
“The Board of Directors has given approval for issuing bonds to raise Rs. 8,000 crore this year,” a senior FCI official told PTI.
Last year, FCI had raised Rs. 5,000 crore via bonds issue though it had sought approval for Rs. 13,000 crore to improve cash flow for its working capital.
The FCI is working on the proposal and it will be sent to the Food Ministry soon, the official added.
According to the official, FCI is mulling issuing bonds with a 10-15 year maturity period and the interest rate will be decided through the open bidding process.
The official also mentioned that it may raise the entire Rs. 8,000 crore in one go, or may issue multiple offers depending upon the market situation.
The bid could be made for a minimum amount of Rs. 250 crore, he added.
Last year’s FCI bond issue garnered an interest rate of 8.62 per cent for 10 years maturity period and 8.80 per cent for 15 years. The issue was over-subscribed by 1.77 times.
The organisation is facing a financial crunch because it has dues worth more than Rs. 1,00,000 crore, including arrears, till last fiscal, while the Centre had provided only Rs. 72,000 crore for the same period.
The organisation is currently handling 77 million tonnes of foodgrain stock.