Low loan offtake affecting infrastructure, says IDFC

November 23rd, 2011 - 9:08 pm ICT by IANS  

Chennai, Nov 23 (IANS) The general economic slowdown is affecting infrastructure projects with loan offtake by borrowers coming down, an official of the Infrastructure Development Finance Company Ltd (IDFC) said Wednesday.

“Compared to the last fiscal, there is a relative slowdown in the sanction and disbursal of loans. During the first six months of the current fiscal, our loan disbursal was around Rs.6,000 crore,” S.J. Balesh, IDFC’s senior director (resources), told reporters here.

IDFC hit the market with tax-saving long-term infrastructure bonds Nov 21 and Balesh said the initial investor trend is yet to be visible.

“Last fiscal, IDFC raised around Rs.1,450 crore through bonds. The retail savings for infrastructure sector have to be channelised through such bond issue,” Balesh said.

He said the bonds have been given the highest AAA rating by credit rating agencies and that would offer comfort to the investors though there are other companies planning to hit the market with similar issues.

The Rs.5,000 face value 10-year bonds, which opened for subscription Nov 21, will close Dec 16 or earlier as may be decided by the company board.

Balesh said there are two types of bonds, one with nine percent interest payable annually and the other with similar rate but compounded annually and payable cumulatively.

He said the bonds have a five-year lock-in period and can be traded on the bourses after that. There is also a buy-back option at the end of five years.

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