IDFC Ltd will offer 9 per cent interest on the first tranche of the tax-saving long-term infrastructure bonds.
The infrastructure finance company plans to raise a total of Rs 5,000 crore in the current financial year through retail bonds, in various tranches.
In the first tranche, the company hopes to raise about Rs 1,500 crore which is almost the same as it raised in the last financial year, said Mr Vikram Limaye, Executive Director, IDFC.
The issue is open for subscription from November 21 to December 16 or earlier. The face value of the bonds is Rs 5,000. Investment up to Rs 20,000 is eligible for tax exemption under Section 80CCF.
The bonds will carry a minimum lock-in period of five years from the date of allotment and can be redeemed after 10 years from the date of allotment. The minimum subscription is Rs 10,000 and in multiples of Rs 5,000 thereafter.
Investors can pledge these bonds to avail themselves of loans after the lock-in period. These bonds also have a buyback option at the end of five years.
These bonds are proposed to be listed on NSE and BSE. They have received the highest credit rating from rating agencies ICRA and Fitch.
Retail bonds are important for diversifying the borrowing mix of the company, Mr Limaye said.
Last year, the company had raised Rs 1,451 crore through the retail bonds from over 7.3 lakh retail investors.
Currently, bonds and debentures account for 63 per cent of the total borrowing mix. Foreign currency loans account for 8 per cent and short-term borrowing (commercial paper) account for 9 per cent of the total borrowing.
The company has been actively raising foreign currency loans since it was accorded the status of an infrastructure finance company last year, said Mr Sunil Kakar, Group Chief Financial Officer, IDFC.