Konkan Railways' offer, which opened on June 14, is the second debt issue in the country which will utilise the web to sell bonds through the book-building route. The offer closes on June 24. Mahanagar Telephone Nigam Ltd (MTNL) in February this year had mopped up Rs 1,000 crore by selling bonds through the Internet.

KRCL plans to raise Rs 150 crore by offering investors a book-building band of 10.30-10.65 per cent, with the balance to be raised in the range of 10.80-11.20 per cent.

The bond float carries a greenshoe option for an unspecified amount. The issue has a yearly put-and-call option, which can be exercised at the end of every year by both the issuer and investors. "The issue offers investors an option of logging on to DebtOnNet.com for placing bids," merchant bankers said.

"KRCL has obtained a credit rating of "LAAA" (SO) from Icra for Rs 520 crore. The funds mopped up from the bond issue are likely to be used for retiring a $115-million loan taken by KRCL two years back at 72.5 basis points over the six-month Libor," they added.

KRCL has placed its information memorandum, the format of commitment letter, and the application form on the Net.

The portal-promoted by IL&FS, Investsmart India, and IL&FS Merchant Bank- is meant for debt issuers and qualified instiitutional investors, and accordingly, access is controlled through a multiple-layer security mechanism consisting of member login and password, and `ePIN'. At the first level, investors have access to the information memorandum and other related information. The investor has to enter the unique `ePIN' first to access the letter of commitment form and thereafter while submitting the completed form.

The book-runners to the issue are Kotak Mahindra Capital Company and ABN-Amro Securities, while the arrangers are ICICI Securities, SBI Caps, AK Capital Services, RR Financial Consultants, and DSP Merrill Lynch.