Infrastructure Development Finance Company (IDFC) could raise Rs 2000-2500 crore in FY11 by issuing tax-free infrastructure bonds to investors, a senior official said on Thursday. "There is a limit by regulation...that would basically mean that we could raise approximately Rs 2,000-2,500 crore of tax free infrastructure bonds," L.K. Narayan, group chief financial officer, said at an analyst conference call.
India plans to issue tax-free bonds with a minimum tenure of 10 years to invest to improve its basic infrastructure. The bonds have the potential to raise about USD 6.5 billion in fiscal 2010/11, government estimates showed.
Recently, government allowed IDFC and others including Industrial Finance CorporationLife Insurance Corporation and other non-banking infrastructure finance companies, approved by the central bank to issue such bonds.
The nature of these bonds suggest that they would be attractive to retail investors whose annual income profiles are in the range of Rs 3-10 crore and to distribute these bonds to retail investors would be a challenge, senior IDFC officials said.
"This is going to be a potentially tough but very interesting opportunity for us, that we will have to very methodically position ourselves and distribute the product," said Rajiv Lall, chief executive and managing director, IDFC.
IDFC will be able to give more clarity on the product over the next quarter, he added.
Interest rates on these bonds are capped to interest rate on equivalent government bonds, Narayan said.
On Wednesday, the firm reported a 23% rise in April-June net profit to Rs 335 crore.
Great Great Great Blog
ReplyDeleteYour blog is so excellent. I am your regular reader of your blog.
I follow your blog. I like your way of posting.
Regards,
ISRO News