Govt allows infra finance companies to raise longer-term funds

The government has allowed infrastructure finance companies to issue secured debentures with a tenure of up to 30 years, a move that will help in raising long-term funds for the sector.

Besides, infrastructure debt fund non-banking financial companies (ID-NBFCs) have been allowed to issue secured debentures for up to 30 years.

"Similarly, housing finance companies have been allowed relaxed terms for maintaining debenture redemption reserve on lines similar to NBFCs registered with RBI (Reserve Bank of India). Necessary amendments in rules have been notified," the Ministry of Corporate Affairs said in a statement today.

A debenture redemption reserve is an account that can only be utilised to redeem debentures.

As per the 12th Five-Year Plan document, India is projected to require investments of about $1 trillion in infrastructure during 2012-17.

The government also clarified that companies can appoint an independent merchant banker, registered with market regulator Sebi, to prepare valuation reports required before making a preferential allotment of shares.

The firms can also engage an independent chartered accountant with a minimum experience of 10 years to prepare valuation reports, the statement said.