Indian Infrastructure Finance

CORPORATE

IIFCL to raise Rs.15 bn via bond issue

by Prashant Kapadia/INS

Dec 19, 2012

Mumbai : Indian Infrastructure Finance (IIFCL) plans to raise Rs.15bn through a bond issue which will open on December on 26 and close on January 11.

IIFCL Chairman and MD S.K Goel said “We plan to raise Rs.15bn with greenshoe option up to the shelf limit of Rs.92.15 bn on first-come first-serve basis. These funds will be utilized to provide long-term funding to PPP projects in the sectors like power and infrastructure,”

The bonds have been rated AAA by CARE and ICRA. The minimum amount of application is Rs.5000with a face value of Rs.1000 each. The maximum tenure of the bonds will be 20years. “Investors have an option to invest for 10 years, 15 years and 20years” Goel said.

“Retail investors will get 50 basis points higher return compared with other categories like QIB, HNI and corporates ,” Goel said.

The bonds carry a coupon rate of 7.69% for 10 years, 7.86 per cent for 15 years and7.90% for 20 years. For the other categories of investors the coupon rate shall be lower by 50 basis points,7.19% for 10 years and 7.36% for 15 years and 7.40% for 20 years.The lead managers to the bond issue are SBI Capital Markets, ICICI Securities, Enam Securities, AK Capital Services and Kotak Mahindra Capital.

IIFCL also revealed that it partly guaranteed Rs.316cr bond issue for its highway project to be announced by GMR next month. “All the necessary documentations are complete. We expect the bonds to be issued in the first week of January,” said  Goel. 24% of the bond issue is to be guaranteed by IIFCL. The guarantee in turn is backed by an insurance cover of 50% by the Asian Development Bank (ADB).

Goel added, “We are in talks with L&T for one of its road projects as well as with Jaypee Group for a hydro project. We expect some activity from these companies by the end of this fiscal.