AP Beverages may raise up to Rs 5,000 cr through issuance of bonds

economictimes.indiatimes.com:

Andhra Pradesh State Beverages Corporation is likely to raise up to ₹5,000 crore through the issuance of bonds in early August, people aware of the development said. «They are likely to carry out the bond sale around August 10.

It is for up to ₹5,000 crore and is in the STRIPS (separate trading of registered interest and principal securities) format for 10 years,» said one of the persons cited earlier. The STRIPS facility permits the purchase and sale of a bond's coupon payments and principal amount as separate, individual securities.

Essentially, the cash flows of a bond can be bought and sold. Such bonds are 'zero-coupon' papers, meaning they do not provide interest payments.

Rather, the appeal for investors is the fact that they are bought at a deep discount, or a much lower price than the sum to be paid when the bonds mature. AP State Beverages Corp has raised ₹10,005 crore through two series of NCDs at a 9.62% interest rate.