IDFC to tap foreign route for raising Rs 3,000 cr

Infrastructure lender IDFC, which is raising Rs 3,400 crore via public issue of infrastructure bonds, may also tap the overseas market for raising a further Rs 3,000 crore, a top company official said today.

"We have the scope of raising Rs 3,000 crore through external commercial borrowings in the current fiscal. We will come up with the issue in due course," Infrastructure Development Finance Company (IDFC) CEO and MD Rajiv Lall told reporters here.

IDFC is coming out with the country's first ever public issue of infrastructure bonds through which the lender expects to mop up Rs 3,400 crore. The issue would open on September 30 and closes on October 18.

It is the first public issue of bonds by an infrastructure finance company under Sec 80CCF of the Income Tax Act that allows tax benefits for investment in long-term infrastructure bonds.

The bond issue proceed would be utilised to finance the infrastructure projects in the country.

Currently, IDFC allocates 40 per cent of its corps to the energy, 24 per cent to telecoms, 20 per cent for transportation and remaining for other infra sectors.

In February, the Reserve Bank had had created a separate entity under the classification of NBFC -- Infrastructure Finance Companies (IFCs).

As such, these IFCs can now raise external commercial borrowings (ECBs) up to 50 per cent of their networth under automatic route. So far, they could do so only under the approval route.

With a networth of Rs 10,000 crore, IDFC have already raised Rs 2,000 crore through ECB in the current fiscal. This leaves a further scope of Rs 3,000 crore for ECB during the fiscal.

These IFCs can also issue tax-free bonds under Section 80CCF of the Income Tax Act, wherein an investor can avail a deduction of up to Rs 20,000 in the taxable income for the current financial year.

The Rs 20,000 deduction is over and above the Rs 1 lakh deduction, under Section 80CC of the Income Tax Act.

So far the RBI has accorded IFC status to only four companies -- IDFC, IFCI, Power Finance Corporation and L&T Infrastructure.