L&T Infra mulls Rs500cr debt from overseas markets

L&T Infra mulls Rs500cr debt from overseas markets

New Delhi: L&T Infrastructure Finance Company, promoted by engineering major Larsen and Toubro, may raise Rs500 crore in debt from overseas markets this fiscal, a senior company official said Friday.

“As per RBI guidelines, we are eligible to raise 50 % of our networth through external commercial borrowings. We are looking to it," L&T Infra vice president G K Shettigar told reporters in New Delhi.

“We are looking to get a minimum discount of 100 basis points (in the external markets) and accordingly we will decide the timing," he added.

As on 30 June, the net worth of the company was about Rs1,061 crore, while it had posted a net profit of Rs48.96 crore. The loan book size of the company is around Rs4,400 crore, about 39 % of which is being distributed to the power sector.

Talking about the tax saving infrastructure bonds issue, which is currently on offer and closes on 2 November, L&T chief financial officer Y M Deosthalee said that “many infrastructure projects in sectors like power, roads, ports etc. are coming in a big way. So I don’t think that there will be any problem in getting investor support".

L&T Infra, which plans to raise Rs200 crore with long term infrastructure bonds issue, is the third company after IFCI and IDFC to use this instrument. It also has an option to retain over-subscription of up to Rs500 crore.

Subscription of up to Rs20,000 made by an individual in the issue would be eligible for deduction from taxable income under section 80CCF of the Income Tax Act.

“This is purely for retail investors and going by the taxpayer’s numbers, the market is about Rs10,000 crore. So what we are aiming is too less," Shettigar added, when asked that whether the issue has come at a wrong time as the investors have several options like Coal India IPO, SBI bonds, IDFC bonds to put in their money.

The tax-free bonds offered by the company, have a maturity of 10 years with two exit options for investors, where the company would offer buyback facility at the end of five and seven years from the date of allotment.

The bonds, which could be traded on the NSE after five years lock-in period, would be issued in Demat and physical form by the company.

It offers interest rate of 7.75 % with buyback option of seven years and 7.5 % for buyback facility after five years.