IFCI Launched Infrastructure Bonds

Corporate Financial Advisory &Consultancy, IFCI on 19 November 2010 launched its infrastructure bonds for retail and HUF segments through the private-placement route. IFCI will raise unsecured, redeemable and non-convertible bonds worth about Rs 100 crore with a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds. IFCI had previously raised about Rs 100 crore, including a greenshoe option of Rs 50 crore. IFCI bonds are unrated unlike the other IDFC bond, which has a triple A rating and L&T, which has a AA+. The IFCI issue is in the nature of a private placement and the level of disclosures is far lower than IDFC and L&T Finance.

The exemption for investments in infrastructure bonds was added recently to the already existing exemption for the investments of Rs 1 lakh in tax-saving instruments under Section 80C, 80CCC, 80CCD such as life insurance premium, provident fund, PPF and National Savings Certificate. The offering s of the kind provided by IFCI, IDFC and L&T became a toast for investors after the finance minister announced a new income tax section, 80CCF which entitles a tax payer to exemptions on money invested in infrastructure bonds.