IIFCL plans to raise Rs 1,200 cr from tax-free bonds

Mumbai, Feb 2 (PTI) India Infrastructure Finance CompanyLtd (IIFCL), a wholly-owned government company, plans to raiseup to Rs 1,200 crore through public issue of tax-free bondsfor funding infrastructure projects.

The issue opens on February 4 and closes on March 4. Thecompany will issue 10-year bonds with 8.15 per cent interestcompounded annually and 15-year bond with 8.30 per cent.

"The funds raised through the public issue will beutilised for company''s infrastructure lending activities,"IIFCL Chairman and Managing Director, S K Goel told reportershere.

The company will not utilise the proceeds of the issuefor providing loans and acquisitions, Goel said.

Bonds with a maturity of 10 years will be issued inseries I and II whereas series III and IV will have a maturityof 15 years each. Each bond has face value of Rs 5,000.

These bonds will be issued only to Resident IndianIndividuals (Major) and HUF. Bonds can be held in demat orphysical form. It is proposed to be listed on the Bombay StockExchange (BSE) and can be traded post the five-year lock-inperiod.

It will be the first bond issue by a Government ofIndia enterprise with tax benefits under Sec 80CCF of theIncome Tax Act, 1961, Goel said. .