IIFCL expects Rs 400 cr capital infusion by December

NEW DELHI: State-owned India Infrastructure Finance Company Ltd ( IIFCL) expects Rs 400 crore capital infusion from the government in the next two months.

"At present, the paid-up capital of the company is Rs 2,900 crore. It would go up to Rs 3,300 crore by December," IIFCL executive director Harsh Kumar Bhanwala said.

Last month, the Cabinet approved the capital infusion proposal for IIFCL so that it can provide long-term debt, take-out finance and credit enhancement to projects.

This will supplement the available long-term finance for infrastructure projects and enable it to raise long-term funds from domestic and overseas markets as well as bilateral and multilateral institutions at low cost.

Set up in 2006, IIFCL's authorised capital was enhanced to Rs 2,000 crore from Rs 1,000 in August 2008.

It was further enhanced to Rs 5,000 crore after another Cabinet approval in October 2011, with a proviso that it may be further increased to Rs 8,000 crore with the Finance Ministry's approval.

IIFCL also proposes to raise up to Rs 2,500 crore through public issue of tax-free bonds.

The first tranche of tax-free bonds of Rs 500 crore with an option to retain over-subscription up to Rs 2,000 crore aggregating to Rs 2,500 crore on first-come, first-serve basis was launched on October 3.

The company had received bids aggregating to Rs 714.37 crore towards the first tranche of bond issue till Thursday.

The proceeds from the issue would be utilised by IIFCL for financing activities, including lending and investments. Besides, the fund would be used to meet working capital requirements.