IIFCL to raise up to Rs 2,500 cr from tax free bonds
New Delhi: State-owned India Infrastructure Finance Company Ltd (IIFCL) on Friday said it proposes to raise up to Rs 2,500 crore through public issue of tax free bonds.
The first tranche of tax free bonds of Rs 500 crore, with an option to retain over-subscription up to Rs 2,000 crore aggregating to Rs 2,500 crore, is on first-come, first-serve basis and was launched on October 3, IIFCL Executive Director Harsh Kumar Bhanwala said.
The company had received bids aggregating to Rs 714.37 crore towards the first tranche of bond issue till yesterday, he added.
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, he said, adding that the public issue closes on October 31.
The coupon rates of these tax free bonds for retail investors are 8.26 percent for 10-year bond, 8.63 percent for 15-year paper and 8.75 percent 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 2,963.20 crore through private placement.
In February, 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.