FCI raises Rs 8,000 cr on BSE BOND platform

State-run Food Corporation of India (FCI) on Tuesday raised Rs 8,000 crore through issue of bonds on private placement basis on BSE's electronic book mechanism platform. FCI, the government's nodal agency to procure and distribute foodgrains, has been raising funds through bonds to purchase wheat and rice from farmers at minimum support price (MSP).

In total, 247 bids for Rs 20,071.2 crore were received on BSE BOND Platform, which is the second highest bids ever received for yield based bidding, the exchange said in a statement. B S Mohapatra, Executive Director (Finance) at FCI said the platform's convenience, user-friendly feature and support from BSE team smoothened the entire bidding and fund-raising process.

"FCI is able to raise Rs 8,000 crore successfully using BSE BOND platform...BSE firmly believes that Indian bond market is tapping ample potential for sizeable growth and India is parking its domestic savings in the most judicious manner," BSE CEO and MD Ashishkumar Chauhan said. The BSE BOND platform was launched on July 1, 2016 to facilitate online bidding for private placement of debt securities. Since then, companies have garnered over Rs 9 lakh crore through the exchange mechanism.

The platform, which allows all categories of investors to place bids, helps bring in transparency and efficiency in price discovery for private placement of debt securities. In November, the government increased the authorised capital of FCI to Rs 10,000 crore from Rs 3,500 crore, which paved the way for additional equity infusion in the state-owned firm.

The decision was aimed at helping FCI in reducing its debt and interest cost. FCI's total borrowing stood at Rs 2.19 lakh crore at October-end. Out of this, Rs 1.91 lakh crore was sourced from the National Small Savings Fund and Rs 15,737.7 crore through issuance of bonds.