Infra Fin cos set to raise Rs 7600 cr through bond issues

Mumbai, Feb 7 (PTI) With the government offering taxbenefits on infrastructure bonds from this year, three leadinginfrastructure finance companies are expected to collectivelyraise about Rs 7600 crore through the bond issues.

Top three infrastructure finance companies, L&TInfrastructure Finance, India Infrastructure Finance Company(IIFCL) and Infrastructure Development Finance Company (IDFC)have floated long term Infrastructure Bonds offering benefitsunder Section 80CCF of the Income Tax Act. IDFC issue isalready closed.

All the three companies targeting about 31 millionincome tax payers in the country would collectively raiseabout Rs 7,600 crore, market analyst Ashok Bagchi said.

Last year the Government approved issuance of longterm tax-free bonds under Sec 80CCF of the IT Act fortax-saving investments for additional Rs 20,000, over andabove the Rs 100,000 limit earlier.

These bonds can be issued by those classified asinfrastructure finance companies by the Reserve Bank of India.

Though the bonds offer interest rates at par if notlower than those offered by banks on their fixed deposits, thepost-tax return would work higher. For instance, if the8.15 per cent offered by IIFCL would fetch an investor in thehighest income tax slab of 30.9 per cent, about 11.58 percent return per annum besides saving Rs 6,180 of income taxon investment of Rs 20,000.

L&T Infrastructure Finance Limited has priced itsretail bond issue at 8.2 per cent annually, and 8.3 per centfor the cumulative option, L&T Infra''s Chief ExecutiveSuneet Maheshwari said.

The 10-year bonds will have a buy back option at theend of fifth and seventh years, Maheshwari said.

The bond issue of IDFC which offered coupon of 8 percent has reportedly received good response and closed forsubscription.