Kolkata-based Srei Infrastructure Finance plans to raise up to Rs 500 crore by way of long-term infrastructure bonds to fund its project finance business.
The company hopes a 30 per cent rise in its combined disbursement in equipment and project finance verticals at Rs 20,000 crore this year. “The proceeds from bond issuance will be used for project finance,” Mr Hemant Kanoria, Chairman and Managing Director, Srei Infrastructure Finance, said in a press statement.
Srei's infrastructure bonds will have a face value of Rs 1,000 crore in the form of secured redeemable non-convertible debentures, which will have benefits of tax benefits under Section 80CCF of the Income Tax Act, 1961.
Under Section 80CCF, an amount, not exceeding Rs 20,000 a year, paid or deposited as subscription to long-term infrastructure bonds during the previous year relevant to the assessment year beginning April 1, 2012, shall be deducted in computing the taxable income.
The first tranche of Srei's bonds of maximum Rs 300 crore will be open for subscription on December 31,2011 and close on January 31, 2012 or earlier. These bonds will be issued in four series with interest rate of 8.90 per cent a year for Series 1 and Series 2 and 9.15 per cent a year for Series 3 and Series 4.
All series of bonds will have a buy back option at the end of five years, the release said. The bonds will have a maturity period of 10 years and 15 years and a lock-in period of five years.