New Delhi: The India Infrastructure Finance Company (IIFCL) has said that it will complete the second tranche (Rs2,600 crore) of the Rs10,000 crore tax-free bonds programme by next week.
“We would be raising the remaining portion (Rs2,600 crore) of the Rs10,000 crore tax-free bonds by 19 March,” IIFCL Chairman S.S. Kohli said.
From the first tranche, IIFCL had raised Rs7,370 crore of tax-free bonds during the third week of January. The bond, which was guaranteed by the government, will give a 6.85% tax-free return to investors and have a maturity period of five years.
Kohli said that no decision has been taken on bonds being sold to retail investors yet.
In a bid to give thrust to infrastructure financing, the government decided to allow IIFCL to raise Rs10,000 crore through tax-free bonds by March 2009 to support a Public- Private Partnership programme of Rs1,00,000 crore in the core sector, including highways.
The fund raised is being utilised for refinancing eligible infrastructure projects, particularly in the highways and port sectors.
The decision to allow IIFCL to raise Rs10,000 crore through tax-free bonds was announced by the government in the first stimulus package in December 2008.
Subsequently, in January the government came out with the second stimulus package permitting IIFCL to raise another Rs30,000 crore through tax-free bonds in 2009-10.
IIFCL is expected to leverage the Rs30,000 crore it has been allowed to raise from tax-free bonds and provide about Rs75,000 crore to projects in the core sector.
About the loan disbursal to infrastructure sector during the fiscal, Kohli said: “So far the company disbursed Rs4,100 crore against the target of Rs4,500 crore till March this year.”
“We would exceed the target,” he said, adding, since its inception in 2006, the company has sanctioned Rs18,000 crore loan amount.
“In case of 75 projects financial closure has been done,” he said.