State companies to raise Rs 23,000 crore next week via tax-free bonds

MUMBAI: State-run lenders for infrastructure projects plan to raise 23,000 crore next week by selling tax-free bonds. The amount is three times what companies, including Bharti Infratel, raised through sale of shares this fiscal.
Power Finance Corp, Indian Railways Finance Corp and Indian Infrastructure Finance have lined up tax-free bonds that will be sold to retail investors at identical interest rates.
In what appears as a sign of softening of interest rates, the sellers have lowered the coupon on these notes by about 3 basis points since the sale by Rural Electrification Corp. A basis point is 0.01 percentage point.
Retail investors investing up to 10 lakh, will get 7.69 per cent for 10-year bonds, and 7.86 per cent for bonds in tenors of 15 years.
The first retail tax-free issue by Rural Electrification Corporation offered 7.72 per cent on 10-year bonds and 7.88 per cent on 15-year bonds.