L&T Infrastructure Finance Company Limited has launched its issue of long term infrastructure bonds under Section 80 CCF of the Income Tax Act 1961. The series of these bonds are known as 2011A. The issue is currently open and would close on Monday the 7th of March.
| Size of Issue | Rs 100 crs |
| Oversubscription | with option to retain oversubscription of upto Rs 300 crs |
| Face Value of each bond | Rs 1,000 each |
| Lead Managers to the Issue | ICICI Securities Limited |
| HDFC Bank Limited | |
| Karvy Investor Services Limited | |
| CO-Managers to the Issue | Bajaj Capital Limited Integrated Enterprises (India) Limited RR Investors Capital Services (Private) Limited |
| Lock in Period | 5 years from deemed date of allotment |
| Trading | After expiry of lock in period at the NSE |
| Maturity Period | At the end of 10 years from allotment in both series |
| Buyback Option | At the end of 5 years and and 7 years in case of both series |
| Isssue Opening Date | Monday 7th February |
| Isssue closing date | Monday 7th March |
| Ratings | LAA+ from ICRA and CARE AA+ from CARE |
| Bidding lot size | Minimum of 5 bonds and 1 bond thereafter |
The issuer company L&T Infra is promoted by L&T in April 2006.The issuer is classified as Infrastructure Finance Company (IFC) by RBI in July 2010. The net worth of the issuer is Rs 1,111 crs as on 30th September 2010 and its loan portfolio as on the same date is Rs 5,273 crs. The company has an equity capital of Rs 683.4 crs as on date. Its net profit for the year ended March 2010 was Rs 110.9 crs while in the current year the company has earned Rs 98 crs in the first half ended September 2010.
The company is offering two series with the following salient features.
| SERIES I | SERIES II | |
| Interest Payment | Annual | Cumulative |
| Coupon Rate | 8.20% per annum | 8.30% per annum |
| compounded annually | ||
| Lock in period | 5 years | 5 years |
There are many schemes which are currently on of infrastructure bonds. It appears the budget to be presented on Monday would bring about some major changes in the bond scheme looking at the shortage of capital that is there in the country. I believe the limit for deduction under the scheme would be increased from the present Rs 20,000 to Rs 1lakh or a bare minimum of Rs 50,000. This would see such bond schemes being open on a round the year basis for all practical purposes.
