IIFCL raising Rs10,000-crore via tax-free bonds

Beginning Monday, state-run India Infrastructure Finance Company (IIFCL) will start the process of raising around Rs10,000 crore through issue of tax-free bonds.
   
"We have just got approval from the government for raising Rs10,000 crore from tax-free bonds. We will be issuing first tranche Rs500 crore on Monday," IIFCL chairman and managing director S K Goel said.

The bonds will have a coupon rate of between 7.35 per cent and 7.40 per cent, he said.

Of the total limit of Rs10,000 crore, 25 per cent would be issued to institutional investors and the remaining 75 per cent would be for retail investors.

IIFCL plans to raise the entire fund in 20 tranches of Rs500 crore each by the end of March 2013.

The funds so raised would be used for financing infrastructure projects.

Various financial institutions are expected to raise a total of Rs60,000 crore during the 2012-13 financial year against Rs30,000 crore raised during the previous fiscal.

The National Highway Authority of India (NHAI) is expected to raise Rs10,000 crore while India Railway Finance Corporation (IRFC) will raise an equal amount and the power sector another Rs10,000 crore.

Among others, Housing and Urban Development Corporation (HUDCO) plans to raise Rs5,000 crore, National Housing Bank (NHB) Rs5,000 crore while the Small Industries Development Bank of India (SIDBI) Rs5,000 crore and the ports sector Rs5,000 crore.