SREI Infra's infrastructure bonds issue to open on Dec 31

Issue date and listing: The first tranche of the bonds (tranche 1 bonds) issue (tranche 1 issue) will open for subscription on December 31, 2011 and close on January 31, 2012 or earlier, as may be decided by the board of the company. The bonds issued under prospectus tranche � I would be for an amount not exceeding Rs 300 crore and are proposed to be listed on the BSE Limited.

Ratings: The bonds proposed to be issued have been rated 'CARE AA' by CARE. The rating of the bonds by CARE indicates high degree of safety with regards to timely servicing of financial obligations.

Issue structure: The issue would be in one or more tranches, for an amount not exceeding the shelf limit. The amount raised in the subsequent tranches shall not exceed the difference between the Shelf Limit and the aggregate amount raised by issue of bonds under the previous tranches. The minimum number of bonds per applicant is 1 bond and in multiples of 1 bond thereafter for resident individuals as well as for Hindu Undivided Family (HUF). An applicant may choose to apply for the tranche 1 bonds across the same series or different series. The mode of allotment for these tranche 1 bonds would be in dematerialized form, however the applicant may hold in the bonds in physical or dematerialized form.

These Bonds are being issued in four series with Interest rate of 8.90% per annum for Series 1 and Series 2 and 9.15% per annum for Series 3 and Series 4. Interest under Series 1 and Series 3 will be payable annually and interest under Series 2 and Series 4 will be payable cumulatively (compounded annually). All series of bonds will have a buy back option at the end of 5 years. The bonds have a maturity period of 10 years and 15 years and shall have a lock-in period of 5 years and can be traded thereafter on BSE. The face value per bond is Rs 1,000.

80CCF benefit: The bonds have been classified as long term infrastructure bonds as per the terms of Section 80CCF of the Income Tax Act. As notified under Section 80CCF, an amount, not exceeding Rs 20,000 per annum, 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 HUF. In the event that any applicant applies for bonds exceeding Rs 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs 20,000 per annum.

The funds raised through the issue of the tranche 1 bonds will be utilized towards infrastructure lending as defined by Reserve Bank of India in the Regulations issued by it from time to time, after meeting the expenditures of, and related to the tranche 1 issue.

The lead managers to the tranche 1 issue are ICICI Securities Limited, Karvy Investor Services Limited, RR Investors Capital Services Private Limited and SREI Capital Markets Limited (a wholly owned subsidiary of the Company to be engaged only in marketing of the Tranche 1 Issue)  The co-lead managers to the issue are SMC Capitals Limited and Bajaj Capital Limited whilst Axis Trustee Services Limited is the Debenture Trustee to the Tranche 1 Issue.