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Simarleen kaur

31 March 2023

Write a short report on recent Fund Placement transactions.

A private placement is a sale of stock shares or bonds to pre-selected investors and institutions
rather than publicly on the open market. It is an alternative to an initial public offering (IPO) for a
company seeking to raise capital for expansion. Private placements are regulated by the U.S.
Securities and Exchange Commission under Regulation D. Investors invited to participate in
private placement programs include wealthy individual investors, banks and other financial
institutions, mutual funds, insurance companies, and pension funds.One advantage of a private
placement is its relatively few regulatory requirements.

Moreover, preparing for an IPO may be costly and require significant preparations to ensure
the company’s books and financial reporting meets certain standards. On top of that, being a
public company requires significant ongoing public disclosure, as public companies report
earnings every quarter, and regularly report other key information and events, such as when
the chief executive or other executives buy or sell shares in the company. A private
placement, on the other hand, allows a company to sell shares that are neither publicly
traded nor registered with the SEC, easing both costs and reporting burdens, while also
enabling management to retain a greater degree of control over the company.

In August 2020, the SEC announced changes to its definition of accredited investor that went
into effect in December 2020. With regard to individual retail investors, an accredited investor
includes, among other things:

• A person—or a married couple or spousal equivalent—with a net worth of at least $1

million (excluding the value of the primary residence), or an individual that earned an
income of at least $200,000, or more than a combined $300,000, in the case of married
couples, for each of the last two years, and reasonably expects the same for the
current year; and

• A person who possesses certain professional certifications, designations or credentials

or other credentials issued by an accredited educational institution, which the SEC may
designate from time to time by order, including holders in good standing of the Series
7, Series 65, and Series 82 licenses.
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Recent Fund placement Transactions

1) Power Grid corporation Board approves raising upto Rs 900

Crore via bonds.
• State-owned Power Grid Corporation's board has approved raising up to Rs
600 crore through bonds to be issued on private placement basis. "Committee
of directors for bonds, in their meeting held today i.e. on 24th March, 2023,
have approved the raising of unsecured, non-convertible, non-cumulative,
redeemable, taxable POWER-GRID Bonds-LXXII (72nd) issue 2022-23 on
private placement up to Rs 600 crore by securitisation of cash flows of 10
years i.e. till FY 2032-33 of its operational SPV (special purpose vehicle) viz.
POWER-GRID NM Transmission Ltd' (PNMTL)," a BSE filing stated.
• It showed that the total issue size is Rs 600 crore, which includes base issue
size of Rs 100 crore and green shoe option of Rs 500 crore.
• The bonds will be listed at BSE and/or NSE. Bonds are redeemable at par in
40 equal instalments and interest payment on quarterly basis, it stated.

2) SBI board to seek nod today to raise Rs 10,000 crore via infra bonds

• State Bank Of India (SBI) board will meet on November 29 to consider raising
funds through the issuance of infrastructure bonds worth up to Rs 10,000
crore during FY23.
• The total issuance includes Rs 5,000 crore green-shoe, and the bonds will be
issued through public issue or private placement, SBI informed indices on
November 24.
• In the July-September quarter, SBI's gross non-performing assets (NPA)
eased to 3.52 percent from 3.91 percent in Q1FY23 and 4.9 percent in Q2FY22.
Similarly, net NPAs dropped to 0.8 percent in September 2022 quarter from
1 percent in June 2022 quarter and 1.52 percent in September 2021 quarter.

3) HDFC to raise Rs 57,000 crore through issuance of NCDs

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• The Board has approved issuance of unsecured redeemable non-convertible
debentures under a Shelf Placement Memorandum, aggregating Rs 57,000 crore, in
various tranches, on a private placement basis, in accordance with the approval
granted by the shareholders of the Corporation at the 45th Annual General Meeting
held on June.
• The company's board has also approved to raise overall borrowing limit of the
company to Rs 6.5 lakh crore outstanding as against Rs 6 lakh crore earlier. The
same has been recommended for approval of the members of the corporation
through postal ballot.

4) Adani plans to refinance $1.15 billion foreign bonds via

Private placement
The group is currently engaged in exploratory talks with potential
overseas investors, such as global insurance firms, to privately place
longer-tenor bonds of up to 30-year maturities, said the people cited
above. The bonds will carry fixed coupon rates.

5) LT Foods raises Rs 390 cr. by selling shares to SALIC via private

placement

LT Foods Ltd on Thursday said it has raised nearly Rs 390 crore by selling shares to Saudi Agricultural and
Livestock Investment Company (SALIC) through private placement.
In a regulatory filing, the company informed that its board has approved issuance and allotment by way of a
preferential allotment on a private placement basis up to 27,408,164 equity shares at a price of Rs 142.23 per
share for cash consideration of up to Rs 389.82 crore.
The preferential issuance of 27,408,164 equity shares is equivalent to 7.89 per cent equity stake in LT
Foods, at Rs 142.23 per share to SALIC, a Saudi Joint Stock Company that is owned by the Public
Investment Fund of the Kingdom of Saudi Arabia.

Works Cited
1) https://www.business-standard.com/amp/article/companies/lt-foods-
raises-rs-390-cr-by-selling-shares-to-salic-via-private-placement-
122111000938_1.html
2) https://economictimes.indiatimes.com/topic/private-placement
3) https://www.moneycontrol.com/news/tags/private-
placement.html/amp
4) https://interlinkcapital.in/private-placement.php