ISSUE INFORMATION OF NTPC TAX FREE BONDS

Presented By:

OBJECTS OF THE ISSUE• It is a public issue by NTPC of tax-free secured redeemable non-convertible Bonds of face

value of 1,000 each in the nature of debentures having tax benefits under Section 10(15) of the Income Tax Act, for an amount of 400 Crore with an option to retain oversubscription of up to 300 Crore for issuance of additional bonds aggregating to a total of up to 700 Crore during fiscal 2016.

• The funds raised through this Issue will be utilized for incurring capital expenditure on the following renewable (solar) energy based power projects:

250 MW Solar Photovoltaic Power Project in Anantpur District, Andhra Pradesh,Other renewable energy (including solar energy) based power projects (“Other

Projects”), andGeneral corporate purposes (not exceeding 25% percent of the amount raised in this

Issue).

• Lead Managers: A.K Capital, Axis Capital, Edelweiss securities & SBICAP Securities.• Issuer : NTPC• Type of Instrument : Public Issue of Tax-free secured redeemable Non- Convertible

bonds.• Face Value per Bond : Rs.1,000 • Issue Price per Bond : Rs.1,000• Minimum Application and in the multiple of thereafter : 5 Bonds (5,000)

(individually or collectively, across all Series of Bonds) and in the multiple of One Bond (1,000) thereafter. • Nature Of Bonds : Tax-free secured Redeemable and Non-convertible.

• Issue Size : NTPC has been authorized to issue tax free secured redeemable non-convertible bonds

for an amount of 1,000 Crore during the fiscal 2016 of which at least 70.00% of aggregate amount of bonds is to be raised through public issue .

Accordingly, the Company has already issued tax-free secured redeemable non-convertible bonds amounting to 300 Crore being 30.00% of the Allocated Amount by way of private placement and now plans to raise the balance 700 Crore through this issue.

Company shall ensure that bonds issued pursuant to the CBDT Notification through public issue route and private placement route in fiscal 2016 shall, in aggregate, not exceed Rs.1,000 Crore.

• Nature of Indebtedness and Ranking/Seniority : The claims of the Bondholders shall be superior to the claims of any unsecured creditors of the Company and subject to applicable statutory and/or regulatory requirements, rank “Pari Passu” inter se to the claims of other secured creditors of the Company having the same security.

• Listings : The Bonds are proposed to be listed on BSE and NSE, with BSE being the Designated Stock Exchange.

• Credit Ratings : AAA (stable) by ICRA.

AAA by CRISIL. AAA by CARE Ratings Agency.

• Eligible Investors : These are divided in to Four categories:

Category 1 [QIB’s (Qualified Institutional Buyers)] : It includes :PFI’s (Public Financial Institutions), Alternative Investment Funds, Scheduled Commercial Banks, MF’s registered with SEBI, State Industrial development corporations, Insurance companies registered with IRDA, PF’s & Pension Funds with minimum corpus of Rs.25 Crore each, Insurance funds set up and managed by the army, navy, or air force of the Union of India & Insurance funds set up and managed by the army, navy, or air force of the Union of India.Category 2 (Corporates) :Limited liability partnerships, statutory corporations, trusts, partnership firms in the name of their respective partners, associations of persons, co- operative banks, regional rural banks, societies registered under the applicable laws in India and other legal entities constituted and/or registered under applicable laws in India.

• Category 3 (HNI’s) :Investors falling under the following categories applying for an amount aggregating to more than Rs.10Lakhs across all series of Bonds in the issue:Resident Individual InvestorsNRI’s applying on a non-repatriation basis only.HUF applying in the name of their respective “kartas”.

• Category 4 (Retail Individual Investors) : Investors falling under the following categories applying for an amount aggregating to more than Rs.10Lakhs across all series of Bonds in the issue : Resident Individual Investors, NRI’s applying on a non-repatriation basis only & HUF applying in the name of their respective “kartas”.

Utilization of Issue• The Company proposes to utilize the funds which are being raised through the Issue,

after deducting the Issue related expenses, estimated to be approximately 4.55 Crore, to the extent payable by our Company, towards funding the following objects :

The total funding required to meet the engineering, procurement and construction costs, infrastructure costs, project management costs, interest during construction etc. (including recoupment of expenditure already incurred) for Anantpur Solar Project is estimated to be 1,779.24 Crore. Anantpur Project has been appraised by an independent agency and has been found viable.

The company will give priority to Anantpur Project for deployment of the funds mobilized. However, in case of any unforeseen delay in the execution of the Anantpur Project, the Company reserves the right to utilize the proceeds for, inter alia, funding of capital expenditure and refinancing for meeting the debt requirement in Other Projects, including recoupment of expenditure already incurred in the projects.

Pending utilization of the Issue proceeds for the purposes described above, the company intend to temporarily invest the Issue proceeds in term deposits with Authorized Dealer - Category 1 banks in India, or otherwise as may be approved by the Board from time to time in accordance with applicable law.

The Company intends to add 10,000 MW to its capacity by way of renewable (solar) energy based power projects in future (“Renewable Projects”). The Government of Andhra Pradesh has, for the 1,000 MW solar photovoltaic project, identified 7,554.53 acres of land in Anantpur district. The Issue proceeds are proposed to be utilized towards the first phase of Anantpur Project/Anantpur Ultra Mega Solar Project and other renewable energy based power projects. The transmission and evacuation infrastructure for the Anantpur Project would be provided by the Government of Andhra Pradesh and is expected to be completed within a period of one-two year.

SECURITY & ASSET COVER• The Bonds will be secured by a “pari passu” charge on specified moveable and/ or

immovable assets of the Company as may be mentioned in the Bond Trust Deed. The Bonds will have asset cover of one time of the total outstanding amount of Bonds and interest thereon.

• The Company reserves the right to create further charge on such asset cover for its present and future financial requirements or otherwise, or as provided for under the Bond Trust Deed, provided that minimum asset cover of one time is maintained.

• The Company has obtained no-objection certificates wherever required from the existing debenture trustees/lenders prior to creation of asset cover of one time of the Bonds including interest thereon.

• The Bondholders are entitled to the benefit of the Bond Trust Deed and are bound by and are deemed to have notice of all provisions of the Bond Trust Deed.

COMMON TERMS & CONDITIONS• Mode of Issuance : In Dematerialized form only.

• Bond Trustee : IDBI Trusteeship Services Limited.• Mode of Trading : In Dematerialized form only.• Registrar to the Issue : Karvy Computershare Private Limited.• Market Lot/Trading Lot : One Bond.• Deemed Date of Allotment : The date on which the Board approves the Allotment of Bonds

for the Issue or such date as may be determined by the Board and notified to the Designated Stock Exchange. All benefits accruing in relation to the Bonds including interest on Bonds shall be available from Deemed Date of Allotment. Actual Allotment of Bonds may occur on a date later than Deemed Date of Allotment.

• Issue Opening Date : September 23, 2015

• Issue Closing Date : September 30, 2015.The Issue shall remain open for subscription from 10.00 A.M. to 5.00 P.M. (IST) during the Issue Period with an option for early closure or extension, as may be decided by the Board or an authorized representative of the Board.

• Interest on Application Amounts received, which are used towards Allotment of Bonds :

Interest on Application Amounts against which Bonds are Allotted to Applicants will be paid at the rate of 7.36% per annum, 7.53% per annum and 7.62% per annum on Series 1B, Series 2B and Series 3B, respectively, and at the rate of 7.11% per annum, 7.28% per annum and 7.37% per annum on Series 1A, Series 2A and Series 3A, respectively, subject to deduction of income tax under the Income Tax Act, from the date of realization of Application Amount through cheque(s)/demand draft(s) up to one day prior to the Deemed Date of Allotment.

CALCULATION OF INTEREST ON BONDS• Interest will be computed on actual/actual basis on the principal outstanding on the

Bonds as per the SEBI Circular bearing no. CIR/IMD/DF/18/2013 dated October 29, 2013

• Effect of Holidays on Payments : If any Coupon/Interest Payment Date falls on a day that is not a Working Day, the

payment shall be made on the immediately succeeding Working Day along with interest for such additional period.

If the Redemption Date/Maturity Date (also being the last Coupon/Interest Payment Date) of any Series of the Bonds falls on a day that is not a Working Day, the redemption proceeds shall be paid on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment.

Face Value Per Bond In Rs.

1,000

Deemed Date of Allotment (assumed)

Monday, October 5, 2015

Frequency of Interest payment

Annual

Interest payment date First Coupon/Interest Payment Date on October 5, 2016, and subsequently on October 5 of every year until the Maturity Date/Redemption Date of the Series of Bonds

Day count convention Actual / Actual

Below is an illustration for guidance in respect of the day count convention and effect of holidays on payments. For the purpose of this Illustration, we have considered effect of holidays on cash flows only for Series 1A and Series 1B. The effect of holidays on cash flows for the other Series of Bonds shall be similar :

SERIES 1ACoupon Rate 7.11%Tenor (no. of years) 10Number of Bonds held (assumed) 100

Redemption Date/Maturity Date Saturday, October 04, 2025

CASH FLOW PAYOUT DATES NO. OF DAYS IN COUPON PERIOD AMOUNT (IN Rs.)

1st Coupon/Interest Payment Date Wed, October 05, 2016 366 7,110.00

2nd Coupon/Interest Payment Date Thu, October 05, 2017 365 7,110.00

3rd Coupon/Interest Payment Date Fri, October 05, 2018 365 7,110.00

4th Coupon/Interest Payment Date Sat, October 05, 2019 365 7,110.00

5th Coupon/Interest Payment Date Mon, October 05, 2020 366 7,110.00

6th Coupon/Interest Payment Date Tues, October 05, 2021 365 7,110.00

7th Coupon/Interest Payment Date Wed, October 05, 2022 365 7,110.00

8th Coupon/Interest Payment Date Thurs, October 05, 2023 365 7,110.00

9th Coupon/Interest Payment Date Sat, October 05, 2024 366 7,110.0010th Coupon/Interest Payment Date Sat, October 04, 2025 364 7,091.00Redemption of Principal Sat, October 04, 2025 1,00,000.00Total Cash Flows 1,71,081.00

SERIES 1A

Coupon Rate 7.36%

Tenor (no. of years) 10Number of Bonds held (assumed) 100

Redemption Date/Maturity Date Saturday, October 04, 2025

CASH FLOW PAYOUT DATES NO. OF DAYS IN COUPON PERIOD AMOUNT (IN Rs.)1st Coupon/Interest Payment Date Wed, October 05, 2016 366 7,360.00

2nd Coupon/Interest Payment Date Thu, October 05, 2017 365 7,360.00

3rd Coupon/Interest Payment Date Fri, October 05, 2018 365 7,360.00

4th Coupon/Interest Payment Date Sat, October 05, 2019 365 7,360.00

5th Coupon/Interest Payment Date Mon, October 05, 2020 366 7,360.00

6th Coupon/Interest Payment Date Tues, October 05, 2021 365 7,360.00

7th Coupon/Interest Payment Date Wed, October 05, 2022 365 7,360.00

8th Coupon/Interest Payment Date Thurs, October 05, 2023 365 7,360.00

9th Coupon/Interest Payment Date Sat, October 05, 2024 366 7,360.0010th Coupon/Interest Payment Date Sat, October 04, 2025 364 7,340.00Redemption of Principal Sat, October 04, 2025 1,00,000.00Total Cash Flows 1,73,580.00

• Governing Law : Laws of the Republic of India • Jurisdiction : The courts of New Delhi will have exclusive jurisdiction for the purposes of

the Issue. • Frequency of Coupon/Interest Payment : Annually.• Depositories : NSDL & CDSL.• Redemption Amount : Amount repayable on the Bonds, comprising the face value of the

Bonds, together with coupon/interest accrued at the applicable coupon/interest rate for each Series of Bonds on the respective Redemption Dates or Maturity Dates.

• Coupon/Interest Type : Fixed Coupon rate.Participation by any of the above category of Applicants in this Issue will be subject to applicable statutory and/or regulatory requirements. Applicants are advised to ensure that Applications made by them do not exceed the investment limits or maximum number of Bonds that can be held by them under applicable statutory and/or regulatory provisions. Applicants are advised to ensure that they have obtained the necessary statutory and/or regulatory permissions/consents/approvals in connection with applying for, subscribing to, or seeking Allotment of Bonds pursuant to the Issue

SPECIFIC TERMS & CONDITIONS FOR EACH SERIES OF BONDSOPTIONS OPTION1 OPTION2 OPTION3

Tenure of Bonds 10 years 15 years 20 years

Maturity/Redemption Date

10 years from Deemed Date of Allotment

10 years from Deemed Date of Allotment

10 years from Deemed Date of Allotment

Coupon Rates for Category I, II and III

Series of Bonds Series 1A Series 2A Series 3A

Coupon Rate (%) per annum 7.11% 7.28% 7.37%

Annualized Yield (%) per annum 7.11% 7.28% 7.37%

Coupon Rates for Category IV

Series of Bonds Series 1B Series 2B Series 3B

Coupon Rate (%) per annum 7.36% 7.53% 7.62%

Annualized Yield (%) per annum 7.36% 7.53% 7.62%

In accordance with the CBDT Notification and for avoidance of doubt, it is clarified as under: The coupon rates indicated under Series 1B, Series 2B and Series 3B shall be payable only on the Retail

Individual Investor Portion in the Issue. Such coupon is payable only if on the Record Date for payment of interest, the Bonds are held by investors falling under the Retail Individual Investor Category/Category IV.

If the Bonds allotted against Series 1B, Series 2B and Series 3B are transferred by Retail Individual Investors to Non- Retail Individual Investors, being Category I, Category II and Category III investors, the coupon rate on such Bonds shall stand at par with coupon rate applicable on Series 1A, Series 2A and Series 3A respectively.

If the Bonds allotted against Series 1B, Series 2B and Series 3B are sold/transferred by the Retail Individual Investors to investor(s) who fall under the Retail Individual Investor category as on the Record Date for payment of interest, then the coupon rates on such Bonds shall remain unchanged.

If on any Record Date, the original Retail Individual Investor Allotee(s)/transferee(s) hold the Bonds under Series 1A, Series 1B, Series 2A, Series 2B, Series 3A and Series 3B for an aggregate face value amount of over ` 10 lakh, then the coupon rate applicable to such Retail Individual Investor Allotee(s)/transferee(s) on Bonds under Series 1B, Series 2B, Series 3B shall stand at par with coupon rate applicable on Series 1A, Series 2A, and Series 3A, respectively.

Bonds Allotted under Series 1A, Series 2A and Series 3A shall carry coupon rates indicated above until the maturity of the respective Series of Bonds irrespective of category of holder(s) of such Bonds.

For the purpose of classification and verification of status of the eligibility of a Bondholder under the Retail Individual Investor category, the aggregate face value of Bonds held by the Bondholders in all the Series of Bonds Allotted under the Issue shall aggregated on the basis of PAN.