Investment in NFBC Infra bonds to prove profitable for the investors
Rs. 550 crore is raised by India Infradebt and L&T Infrastructure Finance Co from the bond market which was the first such fundraising of its kind. These debt funds were conceived more than three years ago under the non-banking finance company (NBFC) structure to help banks by taking out infrastructure loans from them.
ICICI Bank, Bank of Baroda, Citicorp Finance and Life Insurance Corporation of India had created a consortium and had entered into a joint venture (JV) agreement with India Infradebt which is India’s first infrastructure debt fund (IDF) under the NBFC structure.
India Infradebt managing director and chief executive Suvek Nambiar mentioned that the market is showing a good appetite for the triple-A rated bonds floated by IDFs. India Infradebt has raised Rs 300 crore and plans to raise Rs 3,000 crore in the next two years. They are giving better dividends to the investors as they are paying about one percentage point above the prevailing yield on 10-year government securities. The bonds are for 5 years and 10 years and the interest rate is 9.7%. Interest on government securities is payable semi-annually, while India Infradebt will pay annually.
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