IDFC raises Rs 240 cr via bond issue

KOLKATA: Infrastructure Development Finance (IDFC), a leading financier of core sector projects, has raised Rs 240 crore by issuing bonds to insurance companies and commercial banks. IDFC has offered 10.20% annual interest on the bonds with three-year maturity.

Sources close to the development said that insurance companies lapped up bonds as these are classified as their core sector investment, according to Insurance Regulatory Development Authority. A large mutual fund house is believed to have also subscribed to IDFC’s bonds issue.

The Rs 240 crore will be channelled by IDFC to core sector projects. This is the second time that IDFC has mobilised resources from the bond market this fiscal. Last month, it mobilised Rs 150 crore by issuing bonds with 15-month maturity at a 10.35% interest rate.

As a public works company, IDFC has received highest ratings from Icra and Fitch for the bonds. It received a rating for Rs 3,500 crore bond programme for this fiscal. During 2006-07, it mobilised nearly Rs 3,000 crore. The IDFC board has recently cleared a plan to raise capital through issue of equity or quasi-equity instruments up to $500 million equivalent rupee, subject to shareholders approval. It has also joined hands with India Infrastructure Finance to raise $3 billion from overseas markets over the next three years. All mobilised resources are expected to be channelised into India’s core sector development.

According to government estimates, the country will need some $320 billion over five years to improve infrastructure including roads, ports and power generation.

IDFC announced that it gave Rs 7,207 crore in loans during 2006-07, a 19% increase in gross disbursement compared to Rs 6,045 crore during 2005-06. Its loan book grew by 37% to Rs 14,150 crore as on March 31, 2007 from Rs 10,321 crore a year back.

For the fiscal ended March 31, 2007, it recorded a profit after tax of Rs 462.87 crore compared to Rs 375.64 crore for 2005-06 and total income increased to Rs 1,505.74 crore (Rs 1,002.86 crore).