State-run Infrastructure Development Finance Corporation (IDFC) today said it is looking to come out with a retail bond issue in the next fiscal. IDFC’s second tranche of retail bond issue to raise over Rs 2,900 crore opened today. The issue closes on February 4. The company has already raised Rs 471 crore in the first tranche in September.
“We have gross disbursal of Rs 35,000 crore at the end of September 2010. This is higher than Rs 25,000 crore disbursed at the end of March 2010… we would look into such a retail bond issue in next fiscal as well,” IDFC Executive Director Vikram Limaye said.
IDFC has been accorded the infrastructure finance company (IFC) status by the Reserve Bank last year. An IFC can issue only 25 per cent of its incremental investment in the previous fiscal as tax-free infra bonds in a year.
IDFC in September 2010 said it would raise Rs 3,400 crore through infra bonds in the fiscal 2010-11. Of this, however, the company could only raise Rs 471 crore in first tranche.
Limaye said IDFC hopes to raise the remaining Rs 2,929 crore in the January-March quarter as usually the appetite for investing in infrastructure bonds is high in this quarter.
“January-March will show the true investor appetite for this product. We may come out with another tranche by March if the full amount is not raised in the second tranche,” he added.
Limaye said the bonds would be alloted on a first-come- first-serve basis and the offer would close as and when the issue gets fully subscribed.
The bond issue is under Sec 80CCF of the Income Tax Act, wherein an investor can avail a deduction of up to Rs 20,000 in the taxable income for the current financial year.
The Rs 20,000 deduction is over and above the Rs 1 lakh deduction, under Section 80CC of the Income Tax Act.
The bonds issued by IDFC in the second tranche will have a lock-in period of five years and no trading will be permitted during the lock-in period.
The bonds would be listed on the Bombay Stock Exchange and National Stock Exchange.