IDFC to raise Rs 5,000cr through tax-saving infra bonds

Infrastructure Development Finance Company (IDFC) is planning to raise up to Rs 5,000 crore through tax-saving bonds in the current fiscal.

The proceeds from bonds with a face value of Rs 5,000 would be used for investment in infrastructure sector, said the draft document.

The company has appointed J M Financial, ICICI Securities, Karvy Investor Services, Kotak Mahindra Capital and IDFC Capital as the lead arrangers for the issue.

The bonds would be listed on the National Stock Exchange and Bombay Stock Exchange.

IDFC had raised Rs 1,400-crore in three tranches by way of tax-savings bonds in the previous fiscal.

In order to channelise savings for development of infrastructure sector, the government in 2010-11 had included long-term tax savings bonds in the ambit of Section 80 CCF of the Income Tax Act.

Investors in such bonds will get tax exemption on investment up to Rs 20,000 annually. This is over and above the existing tax saving limit of Rs one lakh.

Earlier this week the finance ministry had allowed IDFC to raise funds from long term infrastructure bonds.

Besides, Industrial Finance Corporation of India (IFCI), Life Insurance Corporation (LIC), Infrastructure Development Finance Company (IDFC) and India Infrastructure Finance Company Ltd (IIFCL) and non-banking financial companies (NBFCs) classified as infrastructure finance company by RBI were also permitted to issue tax-savings bonds.