IIFCL to give Rs 10,000 crore to banks for infrastucture project
State-run infrastructure lender IIFCL would soon give Rs 10,000 crore to banks for financing highways and other projects, which developers can avail at an interest rate 10.35% or less.
By Gireesh, ET Bureau |
NEW DELHI: State-run infrastructure lender IIFCL would soon give Rs 10,000 crore to banks for financing highways and other projects, which developers can avail at an interest rate 10.35% or less.
India Infrastructure Finance Company Ltd chairman S S Kohli said on Friday the institution has already raised Rs 7,370 crore through tax-free bonds and would raise rest of the Rs 10,000 crore planned for this fiscal by March 19.
"We are closing the bond issue at a rate of 6.5% (the returns investors would get). We will keep a margin of 1% and lend to banks at 7.85%. Banks can lend at not more than 10.35%. This would facilitate funding of infrastructure projects worth Rs 25,000 crore," Mr Kohli said at a seminar on construction here.
The government has allowed IIFCL to raise Rs 40,000 crore of tax-free bonds to finance projects worth Rs 1 lakh crore, as part of the stimulus packages for the economy. Once the initial Rs 10,000 crore is used up, the lender would raise more.
The fund raised is being utilised for refinancing eligible infrastructure projects jointly executed by the government and private players, particularly in the highways and port sectors. IIFCL can lend upto 20% of the total project cost, but its exposure should be less than that of the lead bank, Mr Kohli added.
The bond, which is guaranteed by the government and is to be repaid in five years, is issued to high networth individuals. Mr Kohli said that no decision has been taken on bonds being sold to retail investors yet. He added that infrastructure developers should take up projects now as the cost of bitumen and steel have declined from last year���s levels.
India Infrastructure Finance Company Ltd chairman S S Kohli said on Friday the institution has already raised Rs 7,370 crore through tax-free bonds and would raise rest of the Rs 10,000 crore planned for this fiscal by March 19.
"We are closing the bond issue at a rate of 6.5% (the returns investors would get). We will keep a margin of 1% and lend to banks at 7.85%. Banks can lend at not more than 10.35%. This would facilitate funding of infrastructure projects worth Rs 25,000 crore," Mr Kohli said at a seminar on construction here.
The government has allowed IIFCL to raise Rs 40,000 crore of tax-free bonds to finance projects worth Rs 1 lakh crore, as part of the stimulus packages for the economy. Once the initial Rs 10,000 crore is used up, the lender would raise more.
The fund raised is being utilised for refinancing eligible infrastructure projects jointly executed by the government and private players, particularly in the highways and port sectors. IIFCL can lend upto 20% of the total project cost, but its exposure should be less than that of the lead bank, Mr Kohli added.
The bond, which is guaranteed by the government and is to be repaid in five years, is issued to high networth individuals. Mr Kohli said that no decision has been taken on bonds being sold to retail investors yet. He added that infrastructure developers should take up projects now as the cost of bitumen and steel have declined from last year���s levels.
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