State-run Food Corporation of India is planning to raise Rs 8,000 crore through issue of bonds 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, Food Corporation of India (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 working capital.
The FCI is working on the proposal and will be sent to the Food Ministry soon, the official added.
According to the official, FCI is mulling issuing bonds with 10-15 years 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 minimum amount of Rs 250 crore, he added.
Last year, FCI had raised Rs 5,000 crore through issuing bonds at 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 financial crunch because it has huge dues. It had dues of over 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 foodgrains stock.