L&T Infrastructure Finance Co Ltd, an arm of engineering and construction giant Larsen & Toubro Ltd., plans to raise `700 crore by issuing infrastructure bonds to retail investors.
L&T Infra plans to raise 200 crore, with an option to retain oversubscription of upto `500 crore, the company said in a statement.
It will be the second such bond sale after Infrastructure Development Finance Corp (IDFC). The company plans to retain upto `3,400 crore with no minimum limit. The IDFC bond sale that was scheduled to close on October 18 after opening on September 30, has been extended to October 22.
Investments of upto `20,000 will be eligible for a tax break under Sec. 80 CCF on the bonds that mature in 10 years. The bonds with a buy back option within five years, will offer interest of 7.5 per cent, while those for seven years will give 7.75 percent per annum.
Bonds with a seven-year buy back option will give a yield of 13.58 per cent on a tax rate of 30.90 per cent, while bonds with a five-year buy back option will give 11.55 per cent on the same tax bracket, it said. The bond sale opens on October 15 and closes on November 2.
L&T Infra was promoted by L&T in April 2006 for the development and financing of the infrastructure sector in India. L&T Infra provides financial products and services to borrowers engaged in infrastructure development, construction, operations and maintenance with a focus on power, roads, telecommunications, oil and gas and ports in India.