CESC Limited , a leading power utility company, has taken a significant step in its debt fundraising efforts. The company's board has approved a private placement of secured redeemable non-convertible debentures (NCDs) worth ₹300 crore, signaling a strategic move to bolster its financial position.

Key Details of the NCD Issue

According to the latest disclosure by CESC, the company plans to issue 30,000 Redeemable, Senior, Secured, Unlisted, Rated Non-Convertible Debentures. Each debenture will have a face value of ₹1 lakh, to be issued at par for cash. The total aggregation of this private placement amounts to ₹300 crore.

Terms and Structure

The NCDs come with the following key features:

• Tenure: 3 years from the Deemed Date of Allotment (September 26, 2025, to September 26, 2028)
• Listing Status: Unlisted
• Coupon Rate: 3 Months T-Bill Rate + 2.30% per annum
• Coupon Payment Frequency: Quarterly
• Redemption: Full redemption on maturity, with provisions for early redemption through call/put options

Security and Charges

The NCDs will be secured by:

1. A first-ranking pari-passu charge via mortgage over the company's immovable fixed assets, both present and future.
2. A first-ranking pari-passu charge through hypothecation of the company's movable fixed assets, both present and future.
3. A first-ranking pari-passu charge by hypothecation over the company's current assets until the Mortgage Document is executed.

Flexibility and Options

The debentures include a Call/Put Option exercisable at the end of 12 months from the deemed date of allotment, at par value. This provides flexibility for both the issuer and the investors.

Impact and Implications

This move by CESC to raise funds through NCDs suggests a strategic approach to managing its capital structure. By opting for a private placement, the company can potentially secure funding at competitive rates while maintaining financial flexibility. The secured nature of the NCDs, backed by the company's assets, may also contribute to favorable terms for this debt instrument.

For investors, these NCDs represent an opportunity to invest in a debt instrument from an established player in the power sector, with the added security of asset-backed collateral.

Quarterly Interest Payment Schedule

The final payment on September 26, 2028, will include the full redemption amount of ₹300 crore along with the last interest payment.

CESC Limited , a prominent player in the power sector, has announced two significant developments that could shape its future financial and operational landscape.

Proposed Non-Convertible Debentures Issue

CESC Limited has informed the stock exchanges that its Board Committee will convene on September 24, 2025, to consider a proposal for issuing Redeemable, Senior, Secured, Unlisted, Rated Non-Convertible Debentures (NCDs). This announcement was made through a communication to the BSE and NSE on September 19, 2025.

The company's move to explore the issuance of NCDs could be aimed at raising funds for various corporate purposes. Non-Convertible Debentures are typically used by companies to borrow money for a fixed term at a variable or fixed interest rate, providing an alternative to traditional bank loans.

Support for Green Power Subsidiary

In a separate but equally significant development, CESC Limited has pledged its support to its wholly-owned subsidiary, CESC Green Power Ltd. The subsidiary is embarking on an ambitious project to set up solar cell and module manufacturing facilities across various locations in India.

Key points of this green initiative include:

• Establishment of a 3+ GW solar cell/module plant
• Battery manufacturing facilities
• A 60 MW renewable energy power plant
• Various ancillary units

The total capital investment for these projects is estimated to be up to INR 5,000.00 crores.

CESC Limited has committed to providing comprehensive financial support to ensure the successful implementation of these projects. This support will encompass equity infusion, strategic assistance, and facilitation of institutional funding.

Implications for CESC Limited

These developments highlight CESC Limited's dual focus on financial management and sustainable energy initiatives. The potential NCD issue could strengthen the company's capital structure, while the support for green power projects aligns with the growing emphasis on renewable energy in India's power sector.

As CESC Limited moves forward with these plans, stakeholders will be keenly watching how these initiatives impact the company's financial health and market position in the evolving energy landscape.

Investors and market analysts will likely await further details on the NCD issue, which may be disclosed following the Board Committee meeting on September 24, 2025. Meanwhile, the green power initiatives of its subsidiary represent a significant step towards sustainable energy production and could position CESC Limited as a key player in India's renewable energy sector.