IIFCL to raise up to Rs 2,500 cr from tax free bonds

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The public issue of tax free bonds will remain open from October 3-31. The public issue of tax free bonds will remain open from October 3-31.
SummaryThe public issue of tax free bonds will remain open from October 3-31.

State-owned India Infrastructure Finance Company Ltd (IIFCL) plans to raise up to Rs 2,500 crore through public issue of tax free bonds.

The first tranche of public issue of tax free bonds of Rs 500 crore with green shoe option up to the shelf limit of Rs 2,000 crore on first come first basis, IIFCL said in a statement.

The proceeds from the issue would be utilised by IIFCL for financing activities, including lending and investments. Besides, the fund would be used to meet working capital requirements.

The public issue of tax free bonds will remain open from October 3-31.

The coupon rates of these tax free bonds for retail investors are 8.26 per cent for 10-year bond, 8.63 per cent for 15-year paper and 8.75 per cent for 20-year bond.

The government authorised IIFCL to issue tax free bonds aggregating up to Rs 10,000 crore during the current fiscal out of which the company has already raised Rs 2963.20 crore through private placement.

In February this year, the government had allowed some financial institutions to mop up about Rs 50,000 crore from tax-free bonds in 2013-14 in a bid to encourage investment in the infrastructure sector.

IIFCL, wholly-owned by the government, provides long-term financial funding to infrastructure projects like power, roads and highways, ports, airports through direct lending, subordinate debt, refinance and credit enhancement.

The company has disbursed loans more than Rs 26,000 crore as of March 31, 2013.

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