Industry players feel that capital market investors and private equity funds have low appetite for investment in infrastructure sector because of inherent risks involved in such ventures.
Poor appetite among investors for this sector is evident from the weak response to the bond issues of infrastructure companies.
Ennore Port, Dredging Corporation of India and the Jawaharlal Nehru Port Trust (JNPT) received tepid response from investors for their tax-free bonds.
It is learnt that these ports could not even garner half the expected amount from these bond issues.
It is also learnt that infrastructure entities raised just 40 percent of the Rs 53,500 crore allowed to be mopped through tax-free bonds in 2012-13.
This year, the pricing has been tighter and yields on government bonds rallied making them unattractive for retail investors, said Ajay Manglunia, head, fixed income, Edelweiss Financial Services.
A lot of these companies who came to the market post January with their issues, got their timing wrong, he added.
The pricing of the tax-free bonds is linked to the yields on benchmark Indian government bonds, such that the coupon issuers offer will be at least 115 basis points lower than the prevailing yields on government securities, which was 50 basis points last year.
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