IDFC plans to raise Rs 3,400 cr through infra bonds

The company has already filed the draft papers with the market regulator Securities and Exchange Board of India (SEBI) for the issue, merchant banking sources said. While officials of Infrastructure Development Finance Company (IDFC) declined to comment on the issue, sources said it would raise up to Rs 3,400 crore through bonds.

"The public offering is likely to be launched during the first week of October," said a source. As per the Draft Shelf Prospectus, funds raised through the bonds having face value of Rs 5,000 a piece will be utilised for infrastructure lending.

Interestingly, this will the first public issue under the new rule that allows tax benefits for investment in long-term infrastructure bonds. In order to encourage investment flow into the all important infrastructure sector, the Union Budget for the current fiscal had provided for tax benefits such bonds.

Investors have been given a tax benefit of Rs 20,000 a year for investing infrastructure bond. The Planning Commission envisages investments of USD 1 trillion in infrastructure during the 12th five-year Plan period, starting 2012, up from the targetted USD 500 million for the current 11th plan period. IDFC is notified as an Infrastructure Finance Company by the Reserve Bank of India.

Citigroup Global Markets, Enam Securities, Kotak Mahindra Capital and IDFC Capital are the lead managers to the issue.

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