IDFC allots Rs 757 crore tax-saving infrastructure bonds

Infrastructure Development Finance Company had sought to raise funds from investors for funding infrastructure projects through a second bonds issue. The government has permitted infrastructure finance companies to raise funds, from investors, for funding long term infrastructure projects. These bonds will be eligible for a tax exemption of Rs 20,000 from the taxable income, under section 80ccf of the Income Tax Act.

The company has collected Rs 757 crore from this issue, taking the total amount collected in 2010-11 to around Rs 1230 crore, while it has regulatory approval to raise about Rs 3,400 crore in 2010-11.

The company had given investors two options, one where annual interest of 8% would be paid and another with compounding interest, at the same rate. The Series 2, with compounding interest, has got maximum interest from investors, with over three-fourth of the funds raised, coming under this option.

At present, other companies such as L&T Infrastructure Finance and and India Infrastructure Finance Corporation Ltd, offering interest rates of up to 8.3%.

Read the announcement made on the BSE here.

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