After infra bonds to raise Rs 3,400 cr,IDFC plans Rs 3K cr ECB

IDFC’s current loan book is growing at 35 per cent to around Rs 37,000 crore. According to Limaye,it plans to grow its advances at a CAGR 40 per cent in the next 2-3 years majorly in infrastructure,telecom and transport sectors. “We have seen some marginal increase in the cost of funds. For a 10-year borrowing from the institutional market,the cost of funds varies between 8.5 per cent and 8.8 per cent. If needed,we may pass on the extra cost to our borrowers. Lending rates would soon go up across the board due to repeated policy rate hikes by the Reserve Bank of India,” Limaye said.

IDFC infra bond issue will remain open between September 30 and October 18.The Series-1 of the bond issue carries a 8 per cent coupon annually while Series-2 offers 8 per cent coupon compounded annually through cumulative option. Series-3 of the bond issue carries a 7.50 per cent coupon,payable annually with a buyback option and series-4 too bears 7.5 per cent coupon compounded annually through cumulative option with buy back. The bond issue with a face value of Rs,5,000 will be of 10 years tenure. “The buy-back option is applicable only after 5 years,after which the bond can also be traded both in the BSE and NSE,” said Rajiv B. Lall,MD & CEO,IDFC adding that the potential in infrastructure space is huge but the hurdle is the execution capability and capacity. “Though the yield of such infra bond is at around 8 per cent but the effective yield is higher than 8 per cent after tax benefits. It could be in the range of 10.5-13 per cent,” Lall added.