IDFC may go for third tranche of infra bond issue in March

Stated-owned Infrastructure Development Finance Company (IDFC) today said it may come out with a third public offer of its long-term infrastructure bonds in March if the sanctioned amount of Rs 3,400 crore is not reached in the upcoming offer.

"We have a total sanction of Rs 3,400 crore for this fiscal (2010-11) out of which we have already done Rs 480 crore through first issue in September. Now, the second tranche is opening from January 17 and if we find we haven’t crossed the sanctioned limit we will do another round in March," IDFC Director S Venkatraghavan here.

In the roadshow for the infrastructure bond issue in Kolkata, he said, people tended to invest more in the fourth quarter.

Venkatraghavan attributed low company brand image among retail investors as a major reason for the lukewarm response to the first tranche of the infrastructure bond issue in September-October 2010.

He said investors should look into absolute return after tax implications before deciding on investing and comparing with bank deposits. Even at 10 per cent tax bracket the return for 5 years was over 10 per cent.

For 10 years, however, the return was less than 10 per cent, according to experts.

Subscription for Rs 5,000 face value bonds would open from January 17 and close on February 4. The bonds have a minimum tenure of 10 years and a lock-in period of at least five years for investors.

After this, investors could exit either through the secondary market or through a buyback facility for a fixed tenure.

Meanwhile, the company targetted to disburse around Rs 40,000 crore during the fiscal. Till September it has disbursed Rs 34,500 crore.