2 min readNew DelhiAug 13, 2013 02:38 PM IST
First published on: Aug 13, 2013 at 02:38 PM IST
The government has allowed 13 institutions,including NTPC,NHB and HUDCO,to raise Rs 48,000 crore through issue of tax free bonds to boost long term infrastructure finance.
The bonds would be in a tenure of 10,15 or 20 years. Retail investors,qualified institutional buyers,corporates and high networth individuals can subscribe to the bonds,the CBDT said in a circular.
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The companies which have been allowed to issue bonds include IIFCL Rs 10,000 crore,IRFC Rs 10,000 crore,National Housing Bank Rs 3,000 crore,NTPC Rs 1,750 crore and NHPC Rs 1,000 crore.
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Besides,National Highway Authority of India NHAI,Rural Electrification Corp REC,Power Finance Corp PFC and Housing and Urban Development Corp HUDCO have been allowed to raise up to Rs 5,000 crore each in the current fiscal.
Ennore Port and Airports Authority of India can issue up to Rs 500 crore each of such bonds and Cochin Shipyard Ltd. can offer as much as Rs 250 crore.
The pricing of these bonds would be linked to government securities yields reported by the Fixed Income Money Market and Derivative Association of India,the circular said.
Besides,each entity would have to earmark as much as 30 per cent of the issue for Sovereign Wealth Funds SWFs.
The circular also mandated that the companies would have to raise at least 70 per cent of the aggregate amount through public offerings and 40 per cent of issue have to be reserved for retail investors.
“The issuers shall earmark suitable amounts within their private placement allocation for placing with Sovereign Wealth Funds,Pension and Gratuity Funds without the requirement of book building procedure,” it added.
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