IDFC offers Tranche 3 of tax-saving long term infrastructure bonds

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  Issue of third tranche of long term  infrastructure bonds by the Company under Section 80CCF of the Income Tax Act, 1961
• Interest rate of 8.43% per annum payable annually or compounded annually
• Resident Indian individuals and HUFs eligible for deduction of up to Rs. 20,000 in computation of taxable income for the current financial year
• (ICRA)AAA Credit Rating by ICRA indicating stable outlookand is the highest credit quality rating assigned by ICRA: Also Fitch AAA(Ind) rating by Fitch indicating long term stable outlook
• The Tranche 3 Bonds Issue opened for subscription from March 19 onwards and close on March 30, 2012
• Tranche 3 Bonds proposed to be listed on NSE and BSE. The Tranche 3 Bonds are tradable, post lock-in period of 5 years from the Deemed Date of Allotment.
• Option to hold Tranche 3 Bonds in either physical or demat form

Mumbai, March 19, 2012: The InfrastructureDevelopmentFinance Company Limited (the “Company” or “Issuer”) has announced the public issue of the second tranche of long term infrastructure bonds of face value of Rs. 5,000, in the nature of secured, redeemable, non-convertible debentures, having benefits under Section 80CCFof the Income Tax Act, 1961(the “Tranche 3 Bonds”), for an aggregate amount not exceeding Rs 3788 crores. (the “Issue”) on the terms set out in the Shelf Prospectus dated September 29, 2011 filed with the Registrar of Companies, Tamil Nadu (the “RoC”) the National Stock Exchange of India Limited (“NSE”), BSE Limited (“BSE”, collectively with NSE the “Stock Exchanges”) and the Securities and Exchange Board of India (“SEBI”) in accordance with the SEBI Debt Regulations on September 29, 2011 (the “Shelf Prospectus”) and the Prospectus – Tranche 3 dated March 12, 2012 (the “Prospectus – Tranche 2”) (the “Issue”) filed with the RoC, Stock Exchanges and SEBI.

This is the issue of the second tranche of long term infrastructure bonds having benefits under Section 80CCF of the Income Tax Act, 1961, (the “Bonds”) by the Company within the overall aggregate limit of Rs. 5000 crore for the financial year 2011-12 (the “Shelf Limit”). The Issue of Tranche 3 Bonds opened for Subscription on March 19, 2012, and will close on March 30, 2012, or earlier, as may be decided by the Board of the Company. In the event of an early closure or extension of the Issue, the Company shall ensure that notice of the same is provided to the prospective investors through newspaper advertisements on or before such earlier or extended date of Issue closure.

Ratings:The Tranche 3 Bonds have been rated as (ICRA)AAA by ICRA and Fitch AAA(Ind) by Fitch. While the ICRA rating indicates stable outlookand the highest degree of safety for timely servicing of financial obligations, the Fitch rating indicates a long term stable outlook.

Issue Structure:

The Tranche 3 Bonds will be issued in two series – Series 1 Tranche 3 Bonds and Series 2 Tranche 3 Bonds and will carry an interest rate of 8.43% per annum, as more specifically laid down in the table below.The Tranche 3 Bonds will carry a minimum Lock-in period of Five (5) Years from the Deemed Date of Allotment and can be redeemed after Ten (10) Years from the Deemed Date of Allotment. The Tranche 3 Bonds also have a buy back option at the end of five (5) years. The Minimum Subscription will be two (2) Tranche 3 Bonds and in multiples of One (1) Tranche 3Bond thereafter.For the purpose of fulfilling the requirement of minimum subscription of two Tranche 3Bonds, an applicant may choose to apply for two Tranche 3 Bonds of the same series or two Tranche 3 Bonds across different series.

Security: The Tranche 3 Bonds are fully secured with first floating paripassucharge over certain receivables of the Company and first fixed paripassucharge over specified immoveable properties of the Company. The security cover is 1.0 times of the outstanding Tranche 3 Bonds at any point in time.

Specific Terms for Each Series of Tranche 3Bonds:

Series	Series 1 Tranche 3Bonds	Series 2 Tranche 3Bonds
Frequency of Interest payment	Annual	Cumulative
Face Value perTranche 3Bond	Rs. 5,000	Rs. 5,000
Buyback Facility	Yes	Yes
Buyback Amount	Rs. 5,000 per Tranche 3Bond	Rs. 7,590 per Tranche 3Bond
Buyback Intimation Period	The period beginning not before nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date	The period beginning not before nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date
Tenor	120 months from the Deemed Date of Allotment	120 months from the Deemed Date of Allotment
InterestRate	8.43% p.a.	N.A.
Maturity Amount	Rs. 5,000 per Tranche 3Bond	Rs. 11,515 per Tranche 3Bond
Yield onMaturity	8.43%	8.43% compounded annually

80CCF Benefit: The Bonds have been classified as “Long Term Infrastructure Bonds” and are being issued interms of Section 80CCF of the Income Tax Act, 1961. In accordance with Section 80CCF, an amount, not exceeding Rs. 20,000 per annum in the year of investment, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2012, shall be deducted in computing the taxable income of a resident individual or Hindu Undivided Family (“the HUF”). In the event that any applicant applies for Tranche 3 Bonds exceeding Rs. 20,000 per annum in the year of the investment, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs. 20,000 per annum in the year of the investment.

We have raised Rs 1212 crs in the first two tranches of Infra Bonds .The funds raised through the public issue of Tranche 1 Bonds, Tranche 2  and Tranche 3 Bonds will be utilized towards “Infrastructure Lending” as defined by Reserve Bank of India (“the RBI”) in the Regulations issued by it from time to time, after meeting the expenditures of, and related to the Issue. The Tranche 3 Bonds will be in the nature of Debt and will be eligible for capital allocation and accordingly will be utilized in accordance with Statutory and Regulatory requirements of Reserve Bank of India and the Ministry of Finance.

The Lead Managers to the Bond Issue are Karvy Investor Services Limited, HDFC Bank Limited -Investment Banking Division, ICICI Securities Limited, JM Financial Consultants Private Limited andIDFC Capital Limited. The Co-Lead Managers to the Issue are Bajaj Capital Limited, RR Investors Capital Services Private Limited and SMC Capitals Limited. The Registrar to the Issue is Karvy Computershare Private Limited.