Infra fin companies to raise Rs 7600cr by issuing bond
With the government offering tax benefits on infrastructure bonds from this year, three leading infrastructure finance companies are expected to collectively raise about Rs 7,600 crore through the bond issues.
February 10, 2011 / 16:35 IST
With the government offering tax benefits on infrastructure bonds from this year, three leading infrastructure finance companies are expected to collectively raise about Rs 7,600 crore through bond issues.
Top three infrastructure finance companies, L&T Infrastructure Finance, India Infrastructure Finance Company (IIFCL) and Infrastructure Development Finance Company (IDFC) have floated long term Infrastructure Bonds offering benefits under Section 80CCF of the Income Tax Act. The IDFC issue is already closed.All the three companies targeting about 31 million income tax payers in the country would collectively raise about Rs 7,600 crore, market analyst Ashok Bagchi said.Last year the Government approved issuance of long term tax-free bonds under Sec 80CCF of the IT Act for tax-saving investments for additional Rs 20,000, over and above the Rs 100,000 limit earlier.These bonds can be issued by those classified as infrastructure finance companies by the Reserve Bank of India.Though the bonds offer interest rates at par if not lower than those offered by banks on their fixed deposits, the post-tax return would work higher. For instance, if the 8.15% offered by IIFCL would fetch an investor in the highest income tax slab of 30.9%, about 11.58% return per annum besides saving Rs 6,180 of income tax on investment of Rs 20,000.L&T Infrastructure Finance Limited has priced its retail bond issue at 8.2% annually, and 8.3% for the cumulative option, L&T Infra''s Chief Executive Suneet Maheshwari said.The 10-year bonds will have a buy back option at the end of fifth and seventh years, Maheshwari said. The bond issue of IDFC which offered coupon of 8 per cent has reportedly received good response and closed for subscription. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
