Retail investors can get higher returns for their investments from the second tranche of tax-free bonds to be issued by IIFCL. State-owned India Infrastructure Finance Company Ltd’s (IIFCL) bonds will hit the market on December 9.
The bond offering will have an issue size of Rs 1,000 crore and green shoe option of Rs 2,000 crore, Harsh Kumar Bhanwala, Acting Chairman and Managing Director, IIFCL, told Business Line here.
The interest rates offered on the second tranche of tax-free bonds are higher than those offered on the first, which closed a month ago. But the rates are lower than HUDCO’s bond issue, which is now open for subscription. The coupon rates offered by IIFCL and HUDCO are not truly comparable as the ratings for their debt instruments vary. While HUDCO enjoys a credit rating of AA+, IIFCL’s bonds have an AAA rating, it was pointed out.
Bhanwala said IIFCL plans to launch a third tranche of such bonds this fiscal. It had mobilised Rs 1,234 crore in the first tranche and had already mobilised as much as Rs 2,963 crore through the private placement route. IIFCL now has a window of about Rs 5,800 crore of funds to raise this fiscal. The Central Board of Direct Taxes had allowed IIFCL to raise as much as Rs 10,000 crore this fiscal through public issue of tax-free bonds.