L&T to raise Rs100 crore in 10-year inflation-linked bonds

Ahead of the Reserve Bank's proposed launch of inflation-indexed bonds on 4 June (See: RBI to start sale of inflation-indexed bonds on 4 June ), infrastructure major Larsen & Toubro (L&T) is moving ahead with plans to raise Rs100 crore in 10-year inflation-linked bonds on 21 May.

The bonds will have a coupon 1.65 per cent above the wholesale price inflation rate, reports quoting sources connected with the deal said.

IDFC is the sole arranger to the deal, the reports said, adding that the pay-in for the bond is set for 21 May. The sale has not been made public yet.

Both L&T and IDFC sources declined to comment on the deal, which is yet to be finalised.

Larsen & Toubro Limited, headquartered in Mumbai, has business interests in engineering, construction, manufacturing goods, information technology and financial services. It is also India's largest engineering and construction company, with a dominant presence in infrastructure, power, hydrocarbon, machinery, shipbuilding and railway sectors.

In recent years, L&T has expanded its global presence and international projects contributed 9 per cent of its overall order book for the 2010-11 financial year.

IDFC, a specialised financial intermediary for infrastructure financing, was set up on 30 January 1997 based on the recommendations of an expert group on commercialisation of infrastructure projects' headed by former Reserve Bank of India deputy governor Rakesh Mohan.

Chennai-based IDFC, promoted by institutional investors, including financial institutions and banks, mutual funds, central and state governments, insurance companies and foreign financial institutions, focuses on the infrastructure space to devise and provide appropriate financing solutions to its customers.