Kolkata, Oct 22 (ANI): Larsen and Toubro (L and T) Infrastructure Finance Company Limited announced a public issue of long-term infrastructure bonds here on Thursday.
The issue was made under section 80CCF of Income Tax Act, 1961 to resident Indian individuals.
S. Maheshwari, Chief Executive Officer, L and T Infrastructure Bond Finance Company Limited said: "You get an yield of as much as 17.2; if you are 20 per cent taxes then you get an yield of as much as 13.5 per cent. And these are much better yields than what you can get. Pre-tax yields are much better that what you can get in any other fixed-end company. But the benefit is available only to the extent of 20 thousand rupees."
As a special feature, the company offers a by-back facility, under which, an investor can exit at the end of five and seven years from the date of allotment.
"Normally, the guideline requires us to have five years and ten years, so people can stay for ten years and they can exit at the end of five years. After five years if they stay, they can exit anytime. But we have additionally offered a seven years by-back," Maheshwari added.
L and T Infra is the third company to float tax-saving bonds. Earlier, IFCI mopped up Rs 50 crore and Infrastructure Development Finance Company (IDFC) raised Rs 3,400 crore by issuing this instrument.
However, L and T Infra bonds offer a lower interest rate between 7.50 per cent and 7.75 per cent compared with 8 per cent offered by IDFC and 7.95 per cent by IFCI.
Budget 2010-11 enables investors to claim a deduction of up to Rs 20,000 from taxable income under a new section (80CCF) of the income tax act by investing in infrastructure bonds of specified companies notified by the RBI. (ANI)