IIFCL set to raise Rs 11,000 cr by March 2012

India Infrastructure Finance Company (IIFCL) on Wednesday said it aimed to raise Rs 11,000 crore by March 2012 from institutional and retail investors through bond issues.

“We have written to the government to come out with a Rs 10,000-crore, tax-free infra bonds issue by March, which would be subscribed by institutions,” IIFCL Chairman and Managing Director S K Goel told reporters. He added the company would also raise Rs 1,000 crore through retail tax saving bonds by the end of the current financial year.

The company had, in 2009, raised Rs 10,000 crore through a tax-free bond issue, Goel said, adding it had raised Rs 95 crore through the retail tax saving bond issue in the last financial year. IIFCL has also firmed up plans of launching a Rs 5,000-crore debt fund to support long gestation infrastructure projects and is awaiting the infra debt fund guidelines from the Reserve Bank of India, he said.

“We have decided to start an NBFC (non-banking financial company), a subsidiary, for the infra debt fund and have already taken the approval of our owner—the government,” he said. After the infra debt fund, Goel said the company also planned to launch a Rs 3,000-crore equity fund.

According to the estimates of the Planning Commission, the infrastructure sector would require investments of $1 trillion in the 12th Plan period (2012-17).

Goel was talking to reporters after signing a memorandum of understanding with public sector lender IDBI for take-out financing. Under the agreement, IIFCL plans to take up to Rs 600 crore of advances to infrastructure from IDBI's books, Goel said. “Tomorrow, our board would study six proposals from IDBI Bank for take-out financing...Initially, we aim to take out loans worth Rs 600 crore from IDBI Bank,” he said.

IIFCL aims to grow its take-out financing books from Rs 70 crore to Rs 10,000 crore and would soon ease certain norms to achieve the high growth target. “We would revise the take-out financing scheme. We have already sent a proposal to relax the norms to the Cabinet and I expect a clearance in the next four to six weeks,” Goel said.

IIFCL would also tie up with more banks to achieve the high target. Currently, it has a tie-up with Union Bank of India, Central Bank of India and Punjab National Bank.

IIFCL opened its second regional office in the city on Wednesday and Goel said plans are afoot to have open an office in Kolkata as well. IIFCL, which had a loan book of Rs 19,000 crore as on March, is targeting to increase it to Rs 25,000 crore by the end of the current financial year.