IIFCL to raise Rs 2,600 cr through tax-free bonds this month

NEW DELHI: The India Infrastructure Finance Company Ltd (IIFCL) plans to raise about Rs 2,600 crore by issuing tax-free bonds this month. This is part of the Rs 10,000 crore of tax-free bonds that the government had allowed IIFCL to raise in a measure to boost the infrastructure sector.

"We would be raising the remaining portion of Rs 10,000 crore bond during this month and modalities are being finalised with the merchant bankers," IIFCL Chairman S S Kohli told reporters on the sidelines of a seminar organ-ised by PHD Chamber here.

He said that the company would issue the bonds through private placement and the exercise would be complete before the end of the financial year in March.

IIFCL raised Rs 7,370 crore through its first tranche of tax-free bonds during the third week of January. The bond, which was guaranteed by the govern-ment, will give a 6.85% tax-free return to investors and has a maturity period of five years.

Mr Kohli said that the coupon rate for the next tranche of bonds would be de-cided in association with the merchant bankers. A meeting in this regard is likely to take place on Tuesday.

The government has allowed IIFCL to raise Rs 10,000 crore through tax-free bonds by March 2009 to support a PPP (Public- Private Partnership) pro-gramme of Rs 1,00,000 crore in the infrastructure sector, including highways.