L&T Infrastructure Finance Company Limited, a 100% subsidiary of Larsen & Toubro Limited, was incorporated in 2006, and is registered with the RBI as a systemically important non deposit taking NBFC and classified as an IFC. The company’s business comprises the provision of financial products and services for customers engaged in infrastructure development, construction and operations & maintenance with a focus on the power, roads, telecommunications, oil and gas and ports sectors in India. The company is registered with the RBI as an Infrastructure Finance Company, or "IFC", which allows it to optimize its capital structure by diversifying its borrowings and accessing long-term funding resources, thereby expanding its financing operations while maintaining its competitive cost of funds. The total income of the company for Fiscal Year 2010 was Rs. 4,504.23 million. The total loans and advances outstanding of the Company as at March 31, 2010 were Rs. 42,884.99 million and total disbursements for Fiscal Year 2010 were Rs. 37,955.14 million.
Salient features of the issue
- Public issue of bonds by an infrastructure finance company under Sec 80 CCFPublic issue of bonds by an infrastructure finance company under Sec 80 CCF.
- Rating(s) : - CARE AA+ by CARE and LAA+ by ICRARating(s) : - CARE AA+ by CARE and LAA+ by ICRA
- These bonds will be issued only to Resident Indian Individuals (Major) and HUF.
- Security : The bonds are fully secured with Exclusive first charge on specific receivables of the Company with an asset cover of one time of the total outstanding amount of Bonds and first pari-passu mortgage/charge on the leasehold rights on land.Security : The bonds are fully secured with Exclusive first charge on specific receivables of the Company with an asset cover of one time of the total outstanding amount of Bonds and first pari-passu mortgage/charge on the leasehold rights on land.
- The Bonds bear an attractive combination of coupon rate ranging between 7.50% and 7.75% p.a. coupled with tax benefits of upto Rs 20,000 under Sec 80 CCF.
- There are 4 investment options, suiting the needs of different categories of investors
- The bonds will be issued in either Demat form or physical form at the option of bondholders
- No TDS shall be deducted for bonds issued in demat form. In case of bonds issued in physical form, TDS will deducted in case interest amount exceeds Rs.2,500 p.a.
- The bonds will be listed on NSE and can be traded after the 5 year lock - in period
- Investors can mortgage or pledge these bonds to avail loans after the lock-in period.
- Under Section 80 CCF of the I.T. Act, an investor in such infrastructure bonds will be entitled to tax deduction of investments of up to Rs 20,000. The deduction is over and above the Rs. 1,00,000 deduction available under section 80C, 80CCC & 80CCD read with section 80CCE.
Issue Structure:
Maturity: The Bonds, with a maturity of 10 years, will be issued in 4 series.
Face Value: Each Bond of face value of Rs 1,000 each.
Minimum application: 5 bonds. Applicant may choose to apply for five (5) Bonds of the same series or five (5) Bonds across different series.
Lock in: 5 years from the Date of Allotment.
Buyback facility: Buyback option available to the Investors at the end of 5 Years or 7 Years.
Issue Highlights
- Issue size: Rs 200 crores with an option to retain an oversubscription of up to Rs 500 crores
- Face value: Rs 1,000
- Minimum Application: 5 bonds.
- Issue opens: 15th October 20 10
- Issue closes: 2nd November 20 10th October 20 10
