L&T Infrastructure Fin Co too hits infra bond circuit
MUMBAI: L&T Infrastructure Finance Company is the latest to hit the market with its second public issue of tax-saving long-term infrastructure bond , after Infrastructure development Finance Company ( IDFC )) and Indian Infrastructure Finance (IIFCL). Rural Electrification Corporation , or REC, sold bonds through private placement.
L&T Infrastructure Finance Company has entered the market with a Rs 100-crore issue of non-convertible debentures, offering a coupon of 8.20% per annum in the first series or series I. The coupon for its second series, or series II, is 8.30%. The bonds issued in the first series redeem after five years whereas the buyback of bonds in the second series is after seven years. The issue also has a greenshoe option of another Rs 200 crore on oversubscription.
At this time, when all the companies coming out with a long-term infrastructure bonds are competitively priced and the interest rates offered are narrowly ranged due to RBI guidelines, retail branding and distribution have become important drivers for the success of these issues. Also, analysts say, these new category products have seen huge appetite from investors. The brand and connect with investors is the key differentiator, besides distribution and geographic reach, says Dhirendra Kumar, CEO of Value Search Online.
The bonds are classified as long-term infrastructure bonds under Section 80CCF of the Income Tax Act.
Under the provisions of the Act, such investments are eligible for deduction of up to Rs 20,000 over and above the Rs 1 lakh deduction available under Section 80C of the I-T Act. These bonds are expected to get good response as investors rush to make investments for saving taxes in this period.
L&T Infrastructure Finance Company has entered the market with a Rs 100-crore issue of non-convertible debentures, offering a coupon of 8.20% per annum in the first series or series I. The coupon for its second series, or series II, is 8.30%. The bonds issued in the first series redeem after five years whereas the buyback of bonds in the second series is after seven years. The issue also has a greenshoe option of another Rs 200 crore on oversubscription.
At this time, when all the companies coming out with a long-term infrastructure bonds are competitively priced and the interest rates offered are narrowly ranged due to RBI guidelines, retail branding and distribution have become important drivers for the success of these issues. Also, analysts say, these new category products have seen huge appetite from investors. The brand and connect with investors is the key differentiator, besides distribution and geographic reach, says Dhirendra Kumar, CEO of Value Search Online.
The bonds are classified as long-term infrastructure bonds under Section 80CCF of the Income Tax Act.
Under the provisions of the Act, such investments are eligible for deduction of up to Rs 20,000 over and above the Rs 1 lakh deduction available under Section 80C of the I-T Act. These bonds are expected to get good response as investors rush to make investments for saving taxes in this period.
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