PFC to raise Rs 5,300 cr via infra bonds

State-run Power Finance Corporation Ltd plans to raise up to Rs 5,300 crore through the public issue ofinfrastructure bonds, each with a face value of Rs. 5,000, to finance infrastructure projects. The bondswill be offered in maturities of 10 years and 15 years with a buyback option after five and seven years

respectively and will fetch a fixed rate of interest up to 8.5 per cent on an annual or cumulative basis.The bond issue is under Sec 80CCF of the Income Tax Act, wherein an investor can get the benefit ofdeduction of up to Rs 20,000 on his taxable income for the financial year 2010-11.

The bonds will be listed on the Bombay Stock Exchange and the issue will start on February 24 and willclose on March 22 of this year.

In the recent past, three infrastructure finance companies viz L&T Infrastructure Finance, IndiaInfrastructure Finance Company and Infrastructure Development Finance Company have issuedsuch bonds and are estimated to have collected about Rs 12,900 crore from the issue of such bondscollectively. Power Finance Corporation Ltd recently also planned to raise up to $1 billion of external

commercial debt in the coming fiscal year.

On Monday the shares of Power Finance Corporation Ltd. closed at Rs. 240.50, down by 2.50 points orby 1.03%.

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