L&t infra provides future perspective on the infrastructure sector in india

Issue Opens on: January 10, 2012

Issue Closes on: February 11, 2012

• L&T Infrastructure Finance Company Limited

Public Issue of Long Term Infrastructure Bondsu/s 80 CCF of Income Tax Act, 1961

2012 A Series

Infra Project Finance Structured Products Financial Advisory Services

• This presentation does not constitute an offer or invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. This presentation is in relation to the proposed issuance of Long Term Infrastructure Bonds by L&T Infrastructure Finance Company Limited (“Company”) and should not be construed in any manner as promotion of the Company or any of its other products. This presentation is being communicated only to persons who have professional experience in matters relating to investments and to persons to whom it may be lawful to communicate it (all such persons being referred to as relevant persons). This presentation is only directed at relevant persons and any investment or investment activity to which the presentation relates is only available to relevant persons or will be engaged in only with relevant persons. This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Investors and prospective investors in securities of the issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on third party sources and involve known and unknown risks and uncertainties. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. The contents of this presentation are subject to changes without prior notice. This document is just a presentation and is not intended to be a “Prospectus” (as defined under the Companies Act, 1956). Any decision to purchase securities in the context of a proposed offering of securities, if any, should be made solely on the basis of information contained in a prospectus published in relation to such an offering. No representation or warranty is given as to the accuracy or completeness of the information contained herein. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations. For risk factor and detailed information, please refer to the Shelf Prospectus dated November 18, 2011 (“Shelf Prospectus”) and Prospectus – Tranche 2 dated January 3, 2012 (“Prospectus Tranche 2”) together with Shelf Prospectus (“the Prospectus”) filed with Registrar of Companies (ROC), Chennai, Tamil Nadu. The Prospectus is available on the websites of Lead Managers: www.icicisecurities.com,www.karvy.com, and www.jmfinancial.in and on the website of BSE at www.bseindia.com.

• All investors proposing to participate in the Public Issue of Long Term Infrastructure Bonds by L&T Infrastructure Finance Company Limited should invest on the basis of information contained in the Prospectus.

• Disclaimer Clause of the RBI: RBI has issued certificate of registration dated January 10, 2007 and a fresh certificate of registration dated July 7, 2010 re-classifying the company under the category “Infrastructure Finance Company”. It must be distinctly understood that the issuing of the certificate and granting a license and approval by RBI in any other matter should not in any way, be deemed or construed to be an approval by RBI to the Prospectus nor should it be deemed that RBI has approved it and the RBI does not take any responsibility or guarantee the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed by the Company in this connection and for repayment of deposits / discharge of liabilities by the Company.

• Disclaimer of BSE: It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the Prospectus has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the Prospectus. The investors are advised to refer to the Prospectus for the full text of the "Disclaimer Clause of BSE Limited".

Disclaimer

http://www.icicisecurities.com/

http://www.karvy.com/

http://www.jmfinancial.in/

http://www.bseindia.com/


Contents

» Infrastructure Sector – Overview

» L&T Infra – The Issuer

» L&T Infra – Financial Performance

» Long term Infrastructure Bonds

» L&T Infra Bonds (2012A Series) – Issue Highlights

» L&T Infra Bonds (2012A Series) – Issue Structure

» Investment Considerations


Infrastructure Sector - Overview


Growing Infra Investments . . but still a long way to go

Sectoral Infrastructure Investments(Rs. in trillion)

2008 2009 2010 20110

1

2

3

4

5

6

7

8

9

10

GDP Growth Rate (%)

Electricity Roads Telecom Ports Others0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

3.40

1.271.02

0.23

3.14

6.59

2.79

3.45

0.41

7.31

Tenth Plan Eleventh Plan

Economic Growth


• 2011 GDP: ~US$ 4.444 trillion (Purchasing power parity basis)

• 5th largest economy in terms of GDP in 2010

• Huge infra investments expected over next 5 years

– Rs 9.0 tn in Power – 57% by Private Sector

– Rs 6.9 tn in Roads – 35% by Private Sector

– Rs 2.0 tn in Telecom sector by private sector

Infrastructure Sector – Strong potential

Strong Infrastructure Base Engine for Accelerated Economic Growth


L&T Infra – The Issuer


• Promoted by L&T in April 2006, for financing Infrastructure Sector

• Subsidiary of L&T Finance Holdings Company Limited

• Obtained NBFC license from RBI on January 10, 2007

• Classified as a Systemically Important Non-Deposit taking NBFC

• Board comprises 50% Independent Directors

L&T Infra – Overview

Classified as Infrastructure Finance Company (IFC) by RBI in July 2010 & Notified as Public Financial Institution by Ministry of Corporate Affairs in June, 2011.


• Sound corporate governance structure

– Comprehensive policies, efficient systems & processes

• Professional management team – with infra sector experience

• Networth of Rs. 1,486.54 Crores; Loan Portfolio of Rs. 8,790.34 Crores as on September 30, 2011

• Rated “CARE AA+” (by CARE) and “[ICRA] AA+” (by ICRA)

L&T Infra – Overview (Contd…)

Classified as Infrastructure Finance Company (IFC) by RBI in July 2010 & Notified as Public Financial Institution by Ministry of Corporate Affairs in June, 2011.


L&T Infra – Board of Directors

Name Experience

Y.M. DeosthaleeDirector

CMD of L & T Finance Holding Company Ltd. Erstwhile Member of the Board and CFO of L&T Instrumental in promoting L&T’s Financial Services business Served as a member of Government and SEBI Committees

N. SivaramanDirector

Heads the Financial Services business of L&T Wide experience in L&T group with varied responsibilities Played key role in structuring demerger of L&T’s cement

business

B.V. BhargavaIndependent Director

Director of CRISIL Ltd and Chairman of its Rating Committee Three decades of experience in development banking &

project finance Served as Vice Chairman & MD of ICICI

Dr. R.H. PatilIndependent Director

Chairman of Clearing Corporation of India Ltd Instrumental in setting up the NSE & NSDL Served as Chairman/Member of various Government, RBI &

SEBI Committees


L&T Infra – Key Managerial Personnel

Name Experience

Suneet K. Maheshwari

Chief Executive & Manager

Heading L & T Infra since inception. Over 30 years of experience in infrastructure finance,

investment banking, corporate finance and private equity An active member of various state and central chambers of

commerce focusing on infrastructure sector policies and PPP matters.


L&T Infra – Products and Services

• Senior Debt Products: Term Loans, Debentures, Securitized Debt

• Mezzanine Debt Products: Sub-Debt, CCD, and Preference Shares

Project Finance

• Equity Capital • Convertible Preference Capital • Hybrid Debt

Equity Investment

• Corporate and Project Advisory• Debt Advisory and Debt Arranging• Capital raising & Strategic Advisory

Financial Advisory Services


L&T Infra – Industry & Sector Focus

Power•Generation•Transmission•Distribution

Roads•Construction and Development•Operation•Maintenance

Telecom•Passive Infrastructure•Telecommunications and

Broadband

Ports•Greenfield Construction•Expansion and Modernization

Other Sectors•Urban Infrastructure•Water and Sanitation•Logistics•SEZs


L&T Infra – Industry & Sector Focus (Contd…)

Others, 35.07%

Telecom, 11.80%

Roads, 14.91%

Power, 36.82%

Ports, 1.39% Telecom,

14.30%

Roads, 7.63%

Power, 56.93%

Others, 20.49%

Ports, 0.65%

Total Infrastructure Loans(as on Sept 30, 2011)

Total = Rs. 8,790.34 Crores

Total Disbursements(for the six months ended Sept 30, 2011)

Total = Rs. 2,846.57 Crores


L&T Infra – Financial Performance


L&T Infra – Financial Overview

Amount in Rs. Mn Period from FY ended FY ended FY ended Period from Period from

Apr to Sept-11 Mar-11 Mar-10 Mar-09 Jul-07 to Mar-0818-Apr-06 to Jun-

07Balance Sheet Items

Equity capital 7,271.50 7,021.50 6,834.00 5,000.00 5,000.00 2,430.00Net worth

14,865.39 12,348.9410,125.6

86,266.11 5,489.50 5,034.82

Loan Funds (Borrowings) 76,017.00 61,935.26 32,367.56 17,712.00 13,650.00 0.00

Infrastructure Loans (1)

87,680.69 71,654.9042,554.3

922,583.47 18,331.81 2,393.12

Investments 3,500.10 3,500.00 250.00 1,150.00 599.07 2,087.39

Profit and Loss Items

Total Income 5,409.26 7,039.75 4,504.23 2,959.89 1,103.24 131.44

Interest & Other Charges 3,239.31 3,801.67 2,462.91 1,629.72 334.50 0.00

Employee, Establishment etc. Costs 197.94 237.85 132.05 111.7 81.91 51.73Provision & Contingencies

52.12 57.85 253.60 77.00 0.00 0.00Profit after Tax

1342.84 2008.27 1108.57 764.59 451.68 49.84Note:

1. Total Infrastructure Loans net of provisions


L&T Infra – Financial Overview

Period from Jul-07 to Mar-08

FY 2009 FY 2010 FY 2011 Period from Apr to Sept-

11

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.00

1,103.24

2,959.89

4,504.23

7,039.75

5,409.26

Total Income (Rs. mn)

Period from Jul-07 to Mar-08

FY 2009 FY 2010 FY 2011 Period from Apr to Sept-

11

0

500

1000

1500

2000

2500

451.7764.6

1108.6

2008.3

1342.8

Profit after Tax (Rs. mn)

As at March'08

As at March'09

As at March'10

As at March'11

As at Sept'11

0.0010,000.0020,000.0030,000.0040,000.0050,000.0060,000.0070,000.0080,000.0090,000.00

100,000.00

18,331.8122,583.47

42,554.39

71,654.9087,903.43

Net Loans Portfolio (Rs. mn)

As at March'08

As at March'09

As at March'10

As at March'11

As at Sept'11

0.002,000.004,000.006,000.008,000.00

10,000.0012,000.0014,000.0016,000.00

5,489.50 6,266.11

10,125.6812,348.94

14,865.39

Networth (Rs. mn)87,680.69


Long Term Infrastructure Bonds


Infra Bonds u/s 80 CCF of IT Act

Purpose Government’s new initiative to channelize long-term savings of

retail investors into infrastructure sector - with tax benefits to investors

Eligible Issuers

IFCs & select other Institutions notified by the Government They are eligible to issue Infra Bonds up to 25% of

incremental infrastructure investments made during FY 2010-11

Tax Benefit

Bonds will have a maturity period of minimum 10 years

Buy-back Buyback facility may be availed after initial lock in period

of 5 years

Eligible Investors

Resident Indian Individuals & HUFs

Investments up to Rs. 20,000 in Infra Bonds eligible for deduction from taxable income for FY 2011-12

Maturity period

Liquidity Bonds will be listed on BSE. Investors can exit through

secondary market after the initial 5 year lock-in periodIn the first tranche (Nov–Dec 2011) the company raised approximately Rs.530 Crores through Infra Bonds. The collections for FY11 Infra Bonds Issue were

Rs.656.20 Crores



Issue Structure Highlights

Issue Schedule : January 10, 2012 to February 11, 2012

Issuer L&T Infrastructure Finance Company Limited (L&T Infra)

Issue DetailsPublic Issue of Long Term Infrastructure Bonds in the nature of Secured, Redeemable, Non Convertible Debentures, having benefits under Section 80 CCF of the Income Tax Act

Eligible Investors

Resident Indian Individuals and HUFs

Size

Aggregate amount up to Rs. 300 Crores with an option to retain an oversubscription of up to Shelf Limit of Rs.1,100 Crores, including the amount received against the allotment of Tranche 1 bonds i.e. approximately Rs. 530 crore

SecurityExclusive first charge on specific receivables and mortgage/charge on the leasehold rights of specific property

Security Cover 1 time

Rating ‘CARE AA+’ by CARE Ratings; ‘[ICRA] AA+’ by ICRA Ratings

Face Value and Min. Application

Rs. 1,000 each. Minimum application for 5 (Five) Bonds and in multiples of 1 (One) Bond thereafter


Instrument Options

Coupon Coupon Payment

Tenor Buyback Option

Series 1 8.70% p.a. Annual 10 years

At the end of 5 years and 7

years

Series 2 8.70% p.a.compounded annually

Cumulative 10 years

At the end of 5 years and 7

years





Maturity / Redemption 10 years from the Date of Allotment

Lock in period 5 years from the Date of Allotment

Listing Bombay Stock Exchange of India (BSE) - Can be traded after 5 year lock-in period

Issuance & Trading

• In Dematerialised and Physical Form*• Trading in Dematerialised form only

Depository NSDL and CDSL

Date of Allotment

The date on which the Board / Committee of Directors approves allotment of Bonds

Basis of Allotment First Come First Serve

In terms of Regulation 4(2)(b) of the Debt Regulations the Company will make public issue of the Bonds in the dematerialised form. However, in terms of Section 8 (1) of the Depositories Act, the Company, at the request of the Investors who wish to hold the Bonds in physical form will fulfil such request.


Returns on Investment

Series 1 2

Interest Payment Annual Cumulative

Coupon Rate 8.70 % p.a.8.70 %

compounded annually

Buyback Date

First Working Day after 5 years from the Date of Allotment and first Working Day after 7 years

from the Date of Allotment

First Working Day after 5 years from the Date of Allotment and first Working Day after 7 years

from the Date of Allotment

Tax Rate YIELD TO THE INVESTORS ON MATURITY (with Tax Benefits u/s 80CCF)

10.30% 10.41% 9.89%

20.60% 12.41% 11.24%

30.90% 14.81% 12.79%

Tax Rate YIELD TO THE INVESTORS ON BUYBACK (with Tax Benefits u/s 80CCF)

Buyback at theend of 5 years




10.30% 11.52% 10.88% 11.09% 10.40%

20.60% 14.82% 13.42% 13.83% 12.34%

30.90% 18.75% 16.45% 17.04% 14.59%


List of Intermediaries

Debenture Trustee

Registrar Sharepro Services (India) Private Limited

Legal Advisor to the Issuer

AZB & Partners

Legal Advisor to the Lead Managers

Krishnamurthy & Co.

Lead Managers

Co-Managers



Investment Considerations


Investment Considerations

CARE AA+ by (CARE) & [ICRA] AA+ by (ICRA) Instruments with a rating of ‘CARE AA+’ by CARE are considered to offer high safety for timely servicing of financial obligations. Such instruments carry very low credit risk. Instruments with a rating of ‘[ICRA] AA+’ by ICRA are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

Dual Credit Rating

Buyback Options

Strong Parentage

Wholly owned subsidiary of L&T Finance Holdings Limited, which is a subsidiary of Larsen & Toubro Limited (L&T - Rated ‘AAA’)

Buyback option available at the end of 5 years and at the end of 7 years for both Series

IssuanceBonds can be held in Physical or Dematerialized form

Returns• Coupon at 8.70% p.a.• Effective yields to investors under buy-back options

(with tax benefits) range from 10.40% to 18.75% p.a.


Other Investment Considerations

While other tax saving instruments available to retail investors provide an exemption from tax on the interest earned, this issue provides an exemption from tax (deduction from taxable income) on the principal amount (Up to Rs.20,000) invested as per section 80CCF of the Income tax Act.

The deduction from taxable income from investment in Infra Bonds is over and above the deduction of Rs.1,00,000 available for investments u/s 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act, 1961

No TDS on interest payment shall be deducted on Infrastructure Bonds held in dematerialized form and listed on a recognized stock exchange in India and in the case of bonds held in a physical form if the interest payment is within Rs.2,500

As per regulations, the maximum interest rate that can be offered on these tax-saving infrastructure bonds is the annualized yield on Government Securities as on the last working day of the immediately preceding month of issue

Furthermore, specific to this issue, the provision to buy-back at two intervals provides added flexibility to investors to exit their investment. For example, If at the end of 5 years the interest rate environment does not justify an exit, the investors/company would have another window for buy back at the end of the 7th year.

Investors can pledge or mortgage Infra Bonds to avail loans from Scheduled Commercial Banks after the 5 year lock-in period.


Pre-TaxReturn

(%)

Post-TaxReturn (%)(1)

Cap on Initial

InvestmentTenor Liquidity

Bank Fixed Deposit (u/s 80C)(2) 17.77% 14.90% 1,00,000 5 years and above Low

National Savings Certificate

12.7% 9.65% N/A 7.5 years Low

Public Provident Fund(3) 17.25% 17.25% 1,00,000 15 years

No, but withdrawal allowed after 6 years

Mutual Funds Debt Scheme-FMP(4)

9.35%-9.65%

8.42%-8.69%

N/A One year Low

Infra Bond – L&T Infra(5) 18.75% 15.28% 20,000

10 years with option to buy back

after 5 yearsLow

Tax Free Bond – NHAI

11.87% 11.87% N/A 10 years Low

Comparative Return Landscape for Debt Securities

Notes:1. Post tax returns have been calculated at the maximum marginal tax rate of 30.9%.2. The rate of return on Fixed Deposit has been considered at 9.25% p.a. for tenure of atleast 5 years which are eligible for deduction under Sec 80C3. Assumed withdrawal after 6 years 4. The investors’ tax liability on long term capital gain is taken at 10%.5. After considering buy back after 5 years with annual interest payment @ 8.7%

Thank You!!!

L&t infra provides future perspective on the infrastructure sector in india

Economy & Finance

shelf prospectus

prospectus tranche

rbi tothe prospectus

disclaimer of bse

basis of information

forwardlooking statements

financial condition

issue closes