India Infra Finance Company in first-ever overseas bond issue

The state-owned infrastructure financier plans to issue a 25- to 30-year, $1bn bond partially guaranteed by the government.

Adding to India’s efforts to attract foreign investors, the government’s infrastructure financing arm, the India Infrastructure Finance Company (IIFCL), is planning its first overseas bond issue in a bid to raise up to $1 billion from long-term institutional investors, such as pension funds and insurance companies.

IIFCL chief general manager Dr. E.S. Rao told Infrastructure Investor the dollar-denominated overseas issue is in the pipeline, with details to be decided after the launch of a tax-free domestic bond offering, expected in September or October. 

The domestic bond issue aims to raise up to IRN100 billion (€1.4 billion; $1.8 billion) and is still pending approval from the Ministry of Finance.

The Indian government has recently allowed more foreign institutional investment in the country. In March 2011, the limit on foreign institutional investment in long-term corporate bonds issued by infrastructure companies was raised from $5 billion to $25billion. 

This is higher than the $20 billion cap on foreign institutional investment in government securities and corporate bonds.