Investment eligible for tax exemption of up to Rs 20,000
Infrastructure Development Finance Corporation (IDFC) plans to raise up to Rs 3,400 crore through a 10-year retail bond issue that opens on October 1 and closes on October 18, the company has said.
The money will be used to grow the asset book, which the company aims to triple over the next three years.
“We aim to grow at a CAGR (compounded annual growth rate) of 35-40 per cent over the next three to four years,” Managing Director and CEO Rajiv Lall said on Monday. “We have historically been a wholesale funded company and this is an attempt to diversify our funding sources.”
The first company to come under the newly created category of infrastructure non-banking financial company (NBFC), it has headroom to raise Rs 3,000 crore through the external commercial borrowing automatic approval route. It recently raised $750 million (Rs 3,450 crore) equity capital by placing shares with domestic and overseas institutional investors.
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The retail bond issue, the first by an infrastructure NBFC, will be available in four categories, two of which come with a buy-back option to be exercised after five years.
The coupon on the bonds is 7.5 per cent per annum for the category with the buy-back option and eight per cent for the regular bond.
In addition, the bonds come with tax exemption of Rs 20,000 under Section 80 CCF, a benefit available only to ‘long term infrastructure bonds’.
“We have been permitted by the government to raise up to Rs 3,400 crore till March 31. We will try to raise as much as we can in the first tranche itself and close the issue once we reach the stipulated amount,” said Vikram Limaye, executive director.
The bonds are fully secured and have been rated ‘LAAA’ by credit rating agency Icra. The lead managers to the issue are Citigroup Global Markets, Enam Securities, Kotak Mahindra Capital and IDFC Capital.