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Tata Power Company Limited has issued 60 years of unsecured NCD @ 10.75% coupon (call in the10th year) with the credit rating of AA/Stable by CRISIL & AA by CARE.

Background of the Company: Incorporated in 1919, Tata Power is Indias largest integrated privatepower utility company and one of the major companies of the Tata Group. Tata power has a

significant presence in generation, transmission and distribution of power. As on March 31, 2012

Tata Power had 5,297 MW of installed generation capacity. In addition, Tata Power also has a

strategic investment in coal assets through a 30% stake in Indonesian thermal coal companies PT

Kaltim Prima Coal and PT Arutmin. The companys license business in Mumbai & New Delhi

contributes about 46% of its consolidated revenue.

The Tata Group comprises over 100 operating companies in seven business sectors namelycommunications and information technology, engineering, materials, services, energy, consumer

products and chemicals. Tata Sons Limited, the primary holding company of the group is the

largest shareholder in Tata Power with 31.8% stake as on March 31, 2012.

Key Features: Interest Rate at 10.75% semi annually (30th April & 31st October)

60 year bonds with call option in the 10th year (21st Aug 2022)

If call option not exercised by the issuer the coupon rate to be stepped up by 100 bps to

11.75% from 10.75%

Available in the ticket size of 10 lakhs Credit Rating of AA/Stable by CRISIL & AA by CARE

Why considering investment in Tata Power Bond: Currently available @ 10.40% yield, the return on the investment is better than the

traditional Fixed Deposit currently available in the market.

Great opportunity to lock in at high yield for a long period (10 year) avoiding reinvestmentrisk

These are listed bonds, which can give an opportunity of capital appreciation with the

movement in interest rates cycle over a period of 3-5 year.

These bonds have senior claim to the share capital

Kindly Note: 10.75% is the coupon payment; the return on theInvestment is 10.40%Issuer The Tata Power Company Limited

Instrument Unsecured, Subordinated, Rated, Listed Securities in the form of

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Non-Convertible Debentures (the Debentures)

Credit Rating CARE AA by CARE and AA/Stable by CRISIL

Coupon 10.75% semi annual

Face Value Rs. 10,00,000 per Debenture

Redemption Price INR 10,00,000 (Rupees Ten Lakhs only) per Debenture and accrued

interest thereon.

Coupon Payment

Date

30th April & 31st October

Tenor/Maturity 60 year from the Date of Allotment

Redemption

Amount

All principal amounts outstanding shall be payable on the relevant Call

Option Date on which the Issuer exercises the Call Option or the Early

Redemption Date, as the case may be, in one bullet installment. On the

Call Option Date or the Early Redemption Date, as the case may be, the

accrued interest and other amounts owed will also be payable.

Coupon Rate Subject to Optional Coupon Deferral and the Coupon Step up, the

Issuer shall be liable to pay Coupon on the Debentures at the fixed rate of

10.75% per annum, payable on a semi-annual basis on each Coupon

Payment Date.

Call Option Call Option can be exercised, at par, by the Issuer at the end of 10 years

from the Deemed date of Allotment and at the end of every yearthereafter (each a Call Option Date), subject to provision of prior written

notice to the holders of the Debentures at least thirty days prior to the

date when the Call Option is proposed to be exercised.

Security Unsecured

Coupon Step Up At the expiry of 10 years from the Deemed Date of Allotment, if the Call

Option is not exercised by the Issuer, the Coupon Rate shall be revised

upwards by 1%. Consequently, the Coupon Rate shall increase to

11.75% per annum and Coupon at the revised rate of 11.75% per annum

shall be payable semi-annually.

Status and

Ranking of the

Debentures

Obligations of the Issuer under the Debentures will rank:

-

junior to any senior unsecured obligations of the Issuer;- pari passu with each other and with any Parity Securities of

the Issuer; and

- senior to preference and equity share capital and any other

securities at par with preference or equity share capital of the

Issuer

For the purpose of this clause, Parity Securities shall mean: (i) the

Perpetual Debentures 2011; (ii) any security issued by the Issuer which

ranks pari passu with the Debentures; and (iii) any security guaranteed

by the Issuer or subject to the benefit of an indemnity entered into by the

Issuer, where the Issuers obligations under the relevant guarantee or

indemnity rank pari passu with the Issuers obligations under the

Debentures.

Optional Interest

Deferral

Yes. Interest, which would otherwise be payable on an Interest Payment

Date, may be deferred at the option of the Issuer if, during the 6 months

preceding the relevant

Interest Payment Date:

(i) no dividend or interest has been declared in respect of the Issuers

preference or equity share capital or Parity Securities; or

(ii) none of the Issuers preference or equity share capital or Parity

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Securities were redeemed, purchased, cancelled, bought back or

otherwise acquired for any consideration by the Issuer.

Any Interest so deferred shall bear interest as if it constituted the

principal of the Debentures at the Interest Payment Date.Any Interest not paid on the Interest Payment Date shall constitute an

Arrears of Interest. The Issuer may further defer any Arrears of Interestby complying with the foregoing requirements. Notwithstanding anything

mentioned herein, the Issuer may choose to pay the Arrears of Interest,in whole and not in part, on any day to the holders of the Debentures.

Any payment made by the Issuer to the holders of the Debentures shall

be first appropriated towards the Arrears of Interest. Interest not paid will

accumulate until such interests are fully paid.

Cumulative

Coupon

All unpaid Coupon pursuant to Optional Coupon Deferral shall

be cumulative on a semi-annual compounded basis

Dividend and

Capital Stopper

Yes. Unless all Arrears of Coupon are fully paid, the Issuer shall

not:

declare or pay any dividends or distributions or make any other

payment on, or will procure that no dividend, distribution or other

payment is made on any securities of the Issuer ranking pari passu with,

or junior to, the Debentures; or Redeem, reduce, cancel, buy back or acquire for any consideration any

security of the Issuer ranking pari passu with, or junior to, the

Debentures.

Events of Default The Debenture Trust Deed will set out certain event of default the

occurrence of which will lead to the Debentures, accrued interest

and all other amounts there under becoming immediately due and

payable upon notification of the Debenture Trustee (as directed by the

Debenture holders):

1. if, subject to the right to defer interest described above, the Issuer

does not pay any principal or Coupon or other amount due and payable

in respect of the Debentures or any of them in full within 30 days of its

due date; or2. The Issuer is declared bankrupt, insolvent or dissolved or liquidated or

any other analogous insolvency order is made against the Issuer.

The date on which the Debenture Trustee gives notice to the Issuer upon

the occurrence of Event of Default shall be called the Early Redemption

Date.

Modification of

Rights

The rights, privileges, terms and conditions attached to the Debentures

may be varied, modified or abrogated with the consent, in writing, of

those Debenture holders who hold at least three fourth of the

outstanding amount of the Debentures or with the sanction accorded

pursuant to a Special Resolution passed at a meeting of the Debenture

holders, provided that nothing in such consent or resolution shall be

operative against the Issuer where such consent or resolution modifiesor varies the terms and conditions of the Debentures, if the same are not

acceptable to the Issuer.