L&T Infrastructure Finance today said it expected to raise Rs 570 crore through its retail tax-saving bond issue, which would be used to fund infrastructure development activities.
The company has authorisation to raise Rs 570 crore from Tranche-2 of its long-term infrastructure bonds, L&T Infrastructure Finance General Manager Shiva Rajaraman said here.
The company has been authorised to raise Rs 1,100 crore from these bonds during the current fiscal. Of this, the company raised Rs 530 crore under a first tranche that had a coupon rate of 9% and closed last month.
However, the Tranche-2 bonds will carry an interest rate of 8.70% per annum, payable annually or compounded annually.
The bonds will have a minimum lock-in period of five years from the date of allotment and can be redeemed after 10 years from the deemed date of allotment, he said.
The bonds will be issued in dematerialised form and trading can also happen in demat form after the lock-in period of five years from the deemed date of allotment, he added.
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The funds raised through this issue will be utilised for infrastructure lending as defined by the RBI, he said.
Faced with the uphill task of meeting the financial requirements of the infrastructure sector, which is estimated to need investments worth $1 trillion in the 12th Five-Year Plan (2012-17) to maintain India's growth rate, the government has incentivised individual taxpayers who subscribe to infra bonds.
Resident Indian individuals subscribing to these bonds are eligible for a deduction of up to Rs 20,000 while calculating their taxable income for the current financial year under Section 80 CCF of the Income Tax Act.
Meanwhile, on credit flow to the power sector, L&T Infrastructure Finance said it has cut on lending to conventional energy projects experiencing structural issues and has been biased toward companies in the renewable space this fiscal.