L&T Infrastructure Finance Co. Ltd launched its issue on 24 November. IDFC Ltd launched its bond on 21 November. The tax benefit is available only for fiscal 2012.

Just a month back, Power Finance Corp. Ltd and Industrial Finance Corp. of India Ltd launched their infrastructure bonds. (IFCI Infrastructure bond link)

Which Infrastructure Bond to buy?

More about L&T Infrastructure Bonds

L&T Infrastructure Finance Company Limited ("the Company or Issuer") to issue Tranche 1 Bonds starting , on November 25, 2011, through a Public Issue of Long Term Infrastructure Bonds with a Face Value of Rs. 1,000 each in the nature of Secured, Redeemable, Non-Convertible Debentures having benefits under Section 80CCF of the Income Tax Act, 1961, ("Debentures" or "Bonds") aggregating up to Rs. 11,000 million (Rs. 1,100 crore) for FY 2012 (the "Shelf Limit"). The Minimum Subscription will be Five (5) Bonds and in multiples of One (1) Bond thereafter.

The Bond Issue will close on December 24, 2011, or earlier, as may be decided by the Board of the Company. The first Tranche of Bonds ("Tranche 1") will carry an interest rate of 9% per annum payable annually or compounded annually. The Tranche 1 Bonds are proposed to be listed on BSE.

The Bonds have been rated 'CARE AA+' by CARE and '[ICRA] AA+' by ICRA considered to offer high safety for timely servicing of financial obligations.

The Bonds will carry a minimum Lock-in period of Five (5) Years from the Date of Allotment and can be redeemed after Ten (10) Years from the Date of Allotment. The Bond will be issued in dematerialised form and trading can also happen in demat form post the Lock-in period of 5 years from the Deemed Date of Allotment. Redemption /Maturity Date shall be 10 years from the Deemed Date of Allotment. In these Bonds, the Bondholder has 3 exit options. The first one is at end of 5 years, the second after 7 years and the third after 10 years which is at the time of redemption. Bonds can be held either in the physical or in demat form.

In the case of Series 1 of the Bonds, the interest rate is 9% payable annually and in the case of Series 2, the interest rate is 9% compounded annually payable at the end of maturity or buyback. The maturity is 10 years from the deemed date of allotment.

80CCF Benefit: The Bonds have been classified as "Long Term Infrastructure Bonds" as per the terms of Section 80CCF of the Income Tax Act. As notified under Section 80CCF, an amount, not exceeding Rs. 20,000 per annum, 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 Bonds exceeding Rs. 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs. 20,000 per annum.

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