IDFC

Press Releases

Mumbai; January 12, 2012

IDFC offers Tranche 2 of tax-saving long term infrastructure bonds

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  • Issue ofsecond tranche of long term  infrastructure bonds by the Company under Section 80CCF of the Income Tax Act, 1961
  • Interest rate of 8.70% per annum payable annually or compounded annually
  • Resident Indian individuals and HUFs eligible for deduction of up to Rs. 20,000 in computation of taxable income for the current financial year
  • (ICRA)AAA Credit Rating by ICRA indicating stable outlookand is the highest credit quality rating assigned by ICRA: Also Fitch AAA(Ind) rating by Fitch indicating long term stable outlook
  • The Tranche 2 Bonds Issue opened for subscription from January 11 onwardsand close on February 25, 2012
  • Tranche 2 Bonds proposed to be listed on NSE and BSE. The Tranche 2 Bonds are tradable, post lock-in period of 5 years from the Deemed Date of Allotment.
  • Option to hold Tranche 2 Bonds in either physical or demat form

Mumbai, January 12, 2012: The InfrastructureDevelopmentFinance Company Limited (the “Company” or “Issuer”) has announced the public issue of the second tranche of long term infrastructure bonds of face value of Rs. 5,000, in the nature of secured, redeemable, non-convertible debentures, having benefitsunder Section 80CCFof the Income Tax Act, 1961(the “Tranche 2Bonds”), for an aggregate amount not exceeding Rs. 4400 crore (the “Issue”) on the terms set out in the Shelf Prospectus dated September 29, 2011 filed with the Registrar of Companies, Tamil Nadu (the “RoC”) the National Stock Exchange of India Limited (“NSE”), BSE Limited (“BSE”, collectively with NSE the “Stock Exchanges”) and the Securities and Exchange Board of India (“SEBI”) in accordance with the SEBI Debt Regulations on September 29, 2011 (the “Shelf Prospectus”) and the Prospectus – Tranche 2 dated January 3, 2012 (the “Prospectus – Tranche 2”) (the “Issue”) filed with the RoC, Stock Exchanges and SEBI.

This is the issue of the second tranche of long term infrastructure bonds having benefits under Section 80CCF of the Income Tax Act, 1961, (the “Bonds”) by the Company within the overall aggregate limit of Rs. 5000 crore for the financial year 2011-12 (the “Shelf Limit”). The Issue of Tranche 2 Bonds opened for Subscription on January 11, 2012, and will close on February 25, 2012, or earlier, as may be decided by the Board of the Company. In the event of an early closure or extension of the Issue, the Company shall ensure that notice of the same is provided to the prospective investors through newspaper advertisements on or before such earlier or extended date of Issue closure.

Ratings: The Tranche 2Bonds have been rated as (ICRA)AAA by ICRA and Fitch AAA(Ind) by Fitch. While the ICRA rating indicates stable outlookand the highest degree of safety for timely servicing of financial obligations, the Fitch rating indicates a long term stable outlook.


Issue Structure:

The Tranche 2 Bonds will be issued in two series – Series 1 Tranche 2 Bonds and Series 2 Tranche 2 Bonds and will carry an interest rate of 8.70% per annum, as more specifically laid down in the table below.The Tranche 2 Bonds will carry a minimum Lock-in period of Five (5) Years from the Deemed Date of Allotment and can be redeemed after Ten (10) Years from the Deemed Date of Allotment. The Tranche 2 Bonds also have a buy back option at the end of five (5) years. The Minimum Subscription will be two (2) Tranche 2 Bonds and in multiples of One (1) Tranche 2 Bond thereafter.For the purpose of fulfilling the requirement of minimum subscription of two Tranche 2 Bonds, an applicant may choose to apply for two Tranche 2 Bonds of the same series or two Tranche 2 Bonds across different series.

Security: The Tranche 2 Bonds are fully secured with first floating paripassu charge over certain receivables of the Company and first fixed paripassucharge over specified immoveable properties of the Company. The security cover is 1.0 times of the outstanding Tranche 2 Bonds at any point in time.


Specific Terms for Each Series of Tranche 2 Bonds:


Series

Series 1 Tranche 2 Bonds

Series 2 Tranche 2 Bonds

Frequency of Interest payment

Annual

Cumulative

Face Value perTranche 2 Bond

Rs. 5,000

Rs. 5,000

Buyback Facility

Yes

Yes

Buyback Amount

Rs. 5,000 per Tranche 2 Bond

Rs. 7,590 per Tranche 2 Bond

Buyback Intimation Period

The period beginning not before nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not before nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

Tenor

120 months from the Deemed Date of Allotment

120 months from the Deemed Date of Allotment

InterestRate

8.70% p.a.

N.A.

Maturity Amount

Rs. 5,000 per Tranche 2 Bond

Rs. 11,515 per Tranche 2 Bond

Yield onMaturity

8.70%

8.70% compounded annually


80CCF Benefit: The Bonds have been classified as “Long Term Infrastructure Bonds” and are being issued interms of Section 80CCF of the Income Tax Act, 1961. In accordance with Section 80CCF, an amount, not exceeding Rs. 20,000 per annum in the year of investment, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2012, 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 Tranche 2 Bonds exceeding Rs. 20,000 per annum in the year of the investment, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs. 20,000 per annum in the year of the investment.

The first tranche of the Bonds was issued by the Company in December, 2011 on the terms set out in the Shelf Prospectus and the Prospectus – Tranche 1 dated November 11, 2011 for an aggregate amount of Rs. 532.62 crore.The funds raised through the public issue of Tranche 1 Bondsand Tranche 2 Bonds 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 Tranche 2 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.

The Lead Managers to the Bond Issue are Karvy Investor Services Limited, HDFC Bank Limited -Investment Banking Division, ICICI Securities Limited, JM Financial Consultants Private Limited andIDFC Capital Limited. The Co-Lead Managers to the Issue are Bajaj Capital Limited, RR Investors Capital Services Private Limited and SMC Capitals Limited. The Registrar to the Issue is Karvy Computershare Private Limited.

Disclaimer: All investors proposing to participate in the Public Issue of Long Term Infrastructure Bonds by IDFC (“the Company or Issuer”) should invest on the basis of information contained in Shelf Prospectus dated September 29, 2011 filed by the Company with the RoC in accordance with the provisions of SEBI Debt Regulationsand Prospectus – Tranche 2dated January 3, 2012, filed withRoC. The Prospectus Tranche - 2 is available on the websites of the stock exchanges at www.bseindia.com and www.nseindia.com, the website of the Company at www.idfc.com and the respective websites of the Lead Managers at www.karvy.com, www.hdfcbank.com, www.icicisecurities.com, www.jmfinancial.in and www.idfccapital.com and Co-Lead Managers at www.bajajcapital.com, www.rrfcl.com and www.smccapitals.com.

Any potential investor should note that investment in bonds involves risks and for details relating to the same, investors should see the Section titled “Risk Factors” of the Prospectus - Tranche 2 dated January 3, 2012. Investors should also note that this is not an offer or an invitation to subscribe to any Securities of the Company.

DISCLAIMER OF NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Offer Document. The investors are advised to refer to the Offer Document for the full text of the ‘Disclaimer Clause of NSE’.

DISCLAIMER OF BSE: It is to be distinctly understood that the permission given by the BSE Limited should not in any way be deemed or construed that the Prospectus has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the Prospectus. The investors are advised to refer to the Prospectus for the full text of the Disclaimer clause of the BSE Limited.


For further information:

Ms. ParminderPanesar
Sr. VP - Corporate Communication
IDFC Ltd.
Tel: +919987012340, +919820809936

Ms. Annet Sumita
Adfactors PR
Tel: 02222813565, 09819405099