L&T Infra Finance to issue tax-free bonds

L&T Infrastructure Finance on Thursday said it would issue its third set of long-term infrastructure bonds for retail investors.

The bonds with benefits under Section 80CCF of the Income Tax Act, have a face value of Rs 1,000 each. The non-banking finance company (NBFC) plans to raise Rs 100 crore from the issue, with an option to retain an oversubscription of up to Rs 300 crore.

The issue is priced at an interest of 8.2 per cent annually and 8.3 per cent under the cumulative option. It will open for subscription from February 7 and will close on March 7, or earlier. However, L&T hopes to close the allotment by February 20, so that investors can file their investment returns. IIFCL and IDFC had recently issued similar bonds — while IDFC issue closes tomorrow, IIFCL’s issue will close on March 4.

“It is an important period, and useful from the issuer’s perspective. We expect more such issuances to come, so that the instrument becomes popular. There is scope for many such issuances as the investor pool is very large,” said Y M Deosthalee, Group CFO, L&T.

The bonds will carry a minimum lock-in period of five years and can be redeemed after ten years from the date of allotment. The issue is proposed to be listed on the stock exchanges. L&T offers the investor a buyback option after seven years. The tax benefit for these bonds will only be available for an investment of upto Rs 20,000.

L&T Infrastructrue Finance is a non-deposit-taking NBFC, which has a networth of Rs 1,111 crore and a loan portfolio of Rs 5,273 crore. It plans to use the funds raised towards infrastructure lending.