IDFC plans to raise up to Rs 2,172 cr via bonds

Infrastructure Development Finance Company (IDFC) plans to raise up to Rs 2,172 crore through long-term infrastructure bonds. Ten-year bonds have a face value of Rs 5,000 each. They are being issued in two series. In the first, they carry a coupon (interest rate) of 8.25 per cent, paid annually. Cumulative option carries same coupon. The interest is compounded annually.

Investments in these bonds carry tax benefits. Individuals and Hindu undivided families (HUF) are eligible for deduction of up to Rs 20,000 in the taxable income for 2010-11. This benefit is available under Section 80CCF of the Income-Tax Act, 1961.

These are secured, redeemable, non-convertible debentures and are listed on exchanges. The bond issue will be open for subscription from February 28 to March 16. This will be the third tranche of bonds to be issued by the company in the current financial year. IDFC can raise up to Rs 3,400 crore in one or more tranches during financial year 2011. It has already raised Rs 1,228 crore from 0.63 million retail investors through two tranches.

The eligible finance companies can raise funds through these bonds up to 25 per cent of infrastructure lending done in previous financial year.

These bonds carry five-year lock-in period. Trading in them is not permitted during lock-in period.

It balance sheet rose by 53 per cent to Rs 48,030 crore in 12 months ended December 2010 from Rs 31,328 crore a year ago. The loan book reported 51 per cent increase to Rs 35,021 crore from Rs 23,190 crore a year ago. Its borrowed funds increased by 51 per cent from Rs 24,312 crore to Rs 36,633 crore.