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PFC to raise Rs 5,300 cr via infra issue

The public issue of secured, redeemable, non-convertible debentures of Rs 5,000 face value each will open for subscription on February 24 and close on March 22.

State-run Power Finance Corporation (PFC) on Wednesday said it plans to raise up to Rs 5,300 crore through the public issue of infrastructure bonds.

"The bonds will be issued in one or more tranches up to Rs 5,300 crore," PFC Chairman and Managing Director Satnam Singh told reporters here.

The public issue of secured, redeemable, non-convertible debentures of Rs 5,000 face value each will open for subscription on February 24 and close on March 22.

The proceeds of the issue will be used to finance infrastructure projects, Singh said.

The bond issue is under Sec 80CCF of the Income Tax Act, wherein an investor can avail a deduction of up to Rs 20,000 on his taxable income for the current financial year.

The bonds offered by the company will have a fixed rate of interest up to 8.5 per cent and will be payable on an annual or cumulative basis. The bonds will be offered in maturities of 10 years and 15 years, with a buyback option after five and seven years, respectively.

The bonds will be listed on the Bombay Stock Exchange.

So far this fiscal, three infrastructure finance companies -- L&T Infrastructure Finance, India Infrastructure Finance Company (IIFCL) and Infrastructure Development Finance Company (IDFC) -- have floated such bonds.

These infrastructure finance companies, which are targeting about 31 million income tax payers in the country, are expected to collectively rake in about Rs 12,900 crore from the issue of such bonds.