L&T Infrastructure and Power Finance Company (PFC) plan to issue infrastructure bonds by February to reap the benefits of the current tax saving environment, after IDFC issued the second tranche of Infra bonds to raise Rs 2,928 crore on Wednesday.
L&T Infrastructure will come out with its second tranche of bonds by mid February to raise Rs 425 crore, said a senior company official. "The issue is planned sometime in second week of February, however we have to finalise the date and coupon rates."
A senior official from PFC said details of their bond issue are being worked out. "We will hit the market in February," he said.
During the press conference to announce its second quarter financial results, PFC's chairman and managing director Satnam Singh had told reporters that PFC would be raising up to Rs 6,000 crore through infra bonds.
In November 2010, L&T had raised Rs 250 crore through infra bonds and it has the mandate to raise Rs 700 crore by the end of this fiscal. However, it will be PFC's debut with infra bonds after it became an infrastructure financing firm.
Following the IDFC's second tranche of infrastructure bonds, the scramble for the next phase of the infrastructure bonds was expected as retail investors have already tested the water and time is ripe for investors to save annual tax deductions, bankers said.
LIC too is expected to come out with the bonds according to people close to the development.
IDFC on Wednesday said it plans to raise up to Rs 2,928.60 crore though its second tranche of infra bonds, which will be used for the company's infrastructure lending activities.
IDFC has the mandate to raise up to Rs 3,400 crore in one or more tranches during 2011. It has already raised Rs 471 crore in the first tranche of bonds issued in November 2010.
The second issue will open for subscription from January 17 and will close on February 4. The 10-year bonds have face value of Rs 5,000 each where resident Indian individuals and Hindu Undivided Families (HUFs) are eligible for deduction of up to Rs 20,000 in computation of taxable income for the current financial year under Section 80 CCF of the Income Tax Act.
The tranche 2 bonds, with a maturity of 10 years, will be issued in two series that will carry an 8 per cent coupon, payable annually and cumulative option -8 per cent coupon -compounded annually.
The bonds will be issued in both dematerialised (demat) and physical forms.
The bonds are proposed to be listed on NSE and BSE.
The bonds are subject to statutory lock-in for a period of five years from the deemed date of allotment.
No trading would be permitted in the bonds during the said lock-in period, the release said.
Credit rating agency Icra has assigned ''LAAA' rating to the tranche 2 bonds. The rating indicates stable outlook and highest safety.
Credit rating agency Fitch has rated the bonds as 'AAA (Ind)', indicating stable outlook, the company said.
vikassrivastav @mydigitalfc.com Ready to go L&T Infra will come out with its second tranche of bonds by February to raise Rs 425 crore PFC CMD said the firm would be raising up to Rs 6,000 crore through infra bonds.
According to people close to development, LIC too is expected to come out with the bonds
