IIFCL to issue tax-free bonds in Nov

Hopes to raise Rs 5,800 crore

Government-owned India Infrastructure Finance Company Limited (IIFCL) today said it would be raising Rs 5,800 crore through tax-free bonds in two equal installments -- the first one in the third or the fourth week of this month and the next in January.

The company is also negotiating with three overseas multilateral agencies to raise $750 million as a part of the funding needs in the next couple of years, according to IIFCL chairman and managing director Harsh Kumar Bhanwala.

With the proposed  tax-free bonds issue, IIFCL will be achieving the mandate to raise Rs 10,000 crore under this route in the current year as it had already issued Rs 4,200-crore tax-free bonds earlier this year. The company expects to touch the Rs 50,000-crore business mark by the end of the current financial year.

Bhanwala said IIFCL’s new product offerings would drive the growth in a situation where infrastructure companies had become highly leveraged.  About 45 per cent of the gross sanctions of Rs 52,907 crore by the company were in the road sector followed by 40 per cent in energy projects.

The company is launching Takeout  Finance scheme under which it would lend 40-45 per cent of the debt after the commissioning of a project following the exit of initial lenders with a 20-year repayment tenure.