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L&T Infrastructure Finance's tax-saving infrastructure bond issue to raise up to Rs 400 crore will open on February 7. (The company's issue is for Rs 100 crore but it has the option to retain oversubscription of up to Rs 300 crore.)
L&T Infra's bonds will be issued in two series, each with a maturity of 10 years. In series one, the interest rate is 8.2 per cent and the lock-in period five years. In series two, the interest rate is 8.3 per cent and the lock-in period seven years.
The company will offer a six per cent interest from the day of applying in the case of applications which receive allotment. The prospectus, however, said that the company will not pay interest on refund of applications, which have not received allotment.
The secure non-convertible debentures will have a face value of Rs 1,000 each.
Investors can apply for a minimum of five bonds. The bonds will be allotted on a first-come first-served basis. The issue will close on March 7. These bonds will be issued only to Resident Indian Individuals and Hindu Undivided Families. Bonds can be held in demat or physical form. They are to be listed on the National Stock Exchange.
L&T Infrastructure's bond issue will the third of its kind this year. The ongoing IDFC issue will close on February 4 and India Infrastructure Finance Company's Rs 1,200-crore issue will open on February 4.
This will be second infrastructure bond issuance by L&T Infrastructure. The company had earlier issued bonds worth Rs 200 crore and had received an oversubscription of Rs 256 crore.
Mr Y.M. Deosthalee, Chief Financial Officer of L&T and member of the board of L&T Infrastructure, said that depending on the response to this bond issuance, the company will take a call on whether to make another the next few months. “We will also look at the Budget to see if the limit of Rs 20,000 (for the purpose of tax saving) is increased before we take a call. The series will definitely be continued next year,” he said.
The application forms will be available in 150 cities through the lead managers and co-book running lead managers to the issue.
Mr Suneet Maheshwari, Chief Executive Officer, L&T Infrastructure Finance, said that he does not expect any more such tax-saving infrastructure bonds this fiscal. “Tax payers have to file their returns by March 15. The L&T Infrastructure issue will close on March 7 and the allotment will be over by mid-March and hence can be used for their tax calculation purposes,” he said.
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