Bonds out, IDFC to raise Rs 250-cr long-term capital

KOLKATA: Infrastructure Development Finance Company ( IDFC) plans to raise 250-crore long-term capital as it has no time left for mobilising more funds through tax-saving retail bonds.

The infrastructure financing company has mobilised around 1,500 crore by selling bonds to tax payers in three tranches, 56% less than what it had targeted to raise via retail bonds. Market sources said this has perhaps prompted IDFC to enter the private placement subordinated debt market before the end of the current fiscal.

A top IDFC official confirmed the development, but said: "We are not desperate for funds." He, however, said as 2010-11 draws to a close, the company did not have enough time to come out with the fourth tranche of infrastructure bonds.

A lead arranger to the 15-year bond issue said IDFC fixed the coupon at 9.33% a year. The bonds will carry a call option at the end of 10 years.

ICICI Bank and Trust Capital are the lead arrangers to the issue.

At the beginning of the year, it had the approval to raise 3,400 crore through tax-savings infrastructure bonds, which is equivalent to 25% of its total exposure to infrastructure lending.

From the first two tranches, IDFC mobilised 1,300 crore from some 6.6-lakh investors. According to primary estimates done by the company, it raised another 200 crore in the third time for which the deadline was extended to March 21 from March 16 earlier. The details of the third issue will be finalised in a couple of days.

"This is almost a test product for the first year," an IDFC official said. His views were corroborated by almost everybody in the infrastructure bond space.

The finance minister has allowed these companies to raise funds through retail bonds in the fiscal year 2011-12 as well.