L&T Infra plans bond issue to raise Rs700 crore from retail investors

According to diversified conglomerate L&T's infrastructure finance subsidiary, it plans to raise up to Rs700 crore from retail investors through a long-term tax-saving infrastructure bond issue.

The issue of the 10-year maturity bonds, which would open till 2 November, follows one of L&T Infra's peer in the infrastructure finance companies (IFC) space, IDFC, tapping the market with a similar Rs3,400 crore issue.

"We were encouraged by the high retail participation in L&T Finance's two issues last year. Targeting retail investors to raise money at reasonable rates is a part of our strategy to enlarge our liability base," L&T Infra's director, Y M Deosthalee, told reporters in Mumbai today.

The company started operations in 2007 and has traditionally been raising money from banks and mutual funds. It said the power sector currently leads among all sectors where funds are disbursed.

The current issue involves bonds of up to Rs200-crore featuring an option to retain over subscription of another Rs500 crore. The issue has been split into four series and can be held in either the physical or dematerialised (demat) form.

The face value of each bond is Rs1,000 with the interest offered ranging between 7.5 to 7.75 per cent. There is a buyback window after five or seven years.

L&T infra plans to list the bonds for trading on the National Stock Exchange. Retail investors, subscribing up to Rs20,000 in the bonds are eligible to avail deduction in computation of taxable taxable income under Section 80 CCF.

Regarding L&T Finance Holding's, (parent company of L&T Infra) Rs1,500-crore IPO, L&T senior vice-president, N Sivaraman, said the company was awaiting market regulator Sebi's nod to go ahead with it.