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L&T Infrastructure Finance to issue infra bonds

Business

L&T Infrastructure Finance Company Ltd (“the Company or Issuer”) is undertaking a Public Issue of “Long Term Infrastructure Bonds 2011 A-Series” having benefits under Section 80CCF of the Income Tax Act, 1961, with a face value of Rs1,000 each in the nature of Secured Redeemable Non-Convertible Debentures aggregating upto Rs1000 million with an option to Retain an oversubscription of up to Rs3,000 million for allotment of additional bonds (“The Issue”).
The Bonds Issue will open for Subscription on February 7, 2011, and close on March 7, 2011, or earlier, as may be decided by the Board of the Company. The Bonds have been rated as “Care AA+.” by CARE and ‘LAA+’ by ICRA, indicating high safety for timely servicing of debt obligations with high credit quality and low credit risk.
The funds raised through the Issue will be utilized towards “Infrastructure Lending” as defined by Reserve Bank of India (“the RBI”) in the regulations issued by it from time to time, after meeting the expenditures of, and related to the Issue. The Bonds will be in the nature of Debt and will be eligible for capital allocation and accordingly will be utilized in accordance with Statutory and Regulatory requirements of Reserve Bank of India and the Ministry of Finance.
Issue Structure: The Bonds will carry a minimum Lock-in period of Five (5) Years from the Date of Allotment and can be redeemed after Ten (10) Years from the Date of Allotment. The Issue is proposed to be listed on the National Stock Exchange of India Limited (“the NSE”). The Minimum Subscription will be Five (5) Bonds and in multiples of One (1) Bond thereafter.
The Bonds have been classified as “Long Term Infrastructure Bonds” as per the terms of Section 80CCF of the Income Tax Act. As notified under Section 80CCF, an amount, not exceeding Rs. 20,000 per annum, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2011, shall be deducted in computing the taxable income of a resident individual or Hindu Undivided Family (“the HUF”). In the event that any applicant applies for Bonds exceeding Rs. 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs. 20,000 per annum.

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