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Tuesday, January 10, 2012

L&T Infra's second tranche of long-term bonds opens on January 10

L&T Infrastructure Finance Company is looking to raise over Rs 500 crore through its second tranche of tax-saving long-term infrastructure bonds. The issue opens on January 10 and closes on February 11.

Last month, the infrastructure finance company raised Rs 530 crore through first tranche of bonds. It is looking to raise a total of Rs 1,100 crore in the current financial year.

In its latest bond issue, the company is offering a coupon rate of 8.7 per cent, which is slightly lower than 9 per cent offered in the first issue. This is because the rate is linked to the yield of the previous month's government securities, said Mr Suneet Maheshwari, Chief Executive, L&T Infrastructure Finance.

Mr Y. M. Deosthalee, Chairman and Managing Director, L&T Finance Holdings, said that this is perhaps an indication that interest rates have peaked.

“This is probably our last issue in the current financial year,” Mr Maheshwari said.

Investment of up to Rs 20,000 in the tax-free long-term infrastructure bonds is eligible for income-tax exemption under Section 80CCF.

Last quarter of the year is when most investors normally make investments to save tax. Hence, there will be lot of interest in the issue, said Mr Atul Mehra, Managing Director and Co-CEO, J. M. Financial, one of the lead managers to the issue.

There is also plenty of interest from investors in Tier-II cities, for whom the limit of Rs 20,000 would be sufficient, said Mr Anup Bagchi, MD and CEO, ICICI Securities, the other lead manager to the issue.
Other tax-free bonds

IDFC Ltd has announced its second tranche of long-term infrastructure bonds, which will open between January 11 and February 25. In its first tranche the company had raised Rs 538 crore, at a coupon of 9 per cent. It is looking to raise a total of Rs 5,000 crore by March 2012.

SREI Infrastructure Finance Ltd is also looking to raise about Rs 300 crore through its first tranche, the subscription for which closes on January 31. The coupon rates range from 8.9 to 9.15 per cent.


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