PROSPECTUS – TRANCHE 2 Dated January 4, 2011 INFRASTRUCTURE DEVELOPMENT FINANCE COMPANY LIMITED (Infrastructure Development Finance Company Limited (the “Company”), with CIN L65191TN1997PLC037415, incorporated in the Republic of India with limited liability under the Companies Act, 1956, as amended (the “Companies Act”)) Registered Office: KRM Tower, 8th Floor, No.1 Harrington Road, Chetpet, Chennai 600 031 Tel: (91 44) 4564 4000; Fax: (91 44) 2854 7597 Corporate Office: Naman Chambers, C-32, G-Block, Bandra-Kurla Complex Bandra (East), Mumbai 400 051 Tel: (91 22) 4222 2000; Fax: (91 22) 2654 0354 Compliance Officer and Contact Person: Mahendra N. Shah, Company Secretary E-mail: [email protected]; Website: www.idfc.com PUBLIC ISSUE BY INFRASTRUCTURE DEVELOPMENT FINANCE COMPANY LIMITED (“COMPANY” OR “ISSUER”) OF LONG TERM INFRASTRUCTURE BONDS OF FACE VALUE OF RS. 5,000 EACH, IN THE NATURE OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES, HAVING BENEFITS UNDER SECTION 80 CCF OF THE INCOME TAX ACT, 1961 (THE “BONDS”), NOT EXCEEDING RS. 34,000 MILLION FOR THE FINANCIAL YEAR 2010 - 2011. THE BONDS WILL BE ISSUED IN ONE OR MORE TRANCHES SUBJECT TO THE OVERALL LIMIT OF RS. 34,000 MILLION FOR THE FINANCIAL YEAR 2010- 2011 UNDER THE SHELF PROSPECTUS FILED WITH THE STOCK EXCHANGES AND SEBI ON SEPTEMBER 23, 2010. THE SECOND TRANCHE OF THE BONDS FOR AN AMOUNT NOT EXCEEDING RS. 29,289.64 MILLION (THE “ISSUE”) SHALL BE ISSUED ON THE TERMS SET OUT IN THIS PROSPECTUS TRANCHE – 2. The Issue is being made pursuant to the provisions of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, as amended (the “SEBI Debt Regulations”). GENERAL RISKS Investors are advised to read the Risk Factors carefully before taking an investment decision in relation to this Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. Investors are advised to refer to “Risk Factors” on page viii, before making an investment in this Issue. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus - Tranche 2, contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Prospectus - Tranche 2 is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other material facts, the omission of which makes this Prospectus - Tranche 2 as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. CREDIT RATING ICRA Limited (“ICRA”) has vide its letter no. 2010-11/MUM/617 dated August 31, 2010, and revalidated through its letter dated December 14, 2010 assigned a rating of LAAA to the Bonds proposed to be issued by the Company, pursuant to the Shelf Prospectus including Tranche 2 Bonds issued under this Prospectus - Tranche 2. This rating of the Bonds indicates stable outlook and is the highest credit quality rating assigned by ICRA. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agency and should be evaluated independently of any other ratings. Please refer to the Annexure to this Prospectus - Tranche 2 for rationale for the above ratings. Fitch Ratings India Private Limited (“Fitch”) has through its letter no. 075/IDFC/BAN/2010-11 dated December 16, 2010, assigned a rating of AAA(ind) to the Tranche 2 Bonds proposed to be issued by the Company under this Prospectus - Tranche 2. This rating of the Tranche 2 Bonds indicates stable outlook. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agency and should be evaluated independently of any other ratings. Please refer to the Annexure to this Prospectus - Tranche 2 for rationale for the above ratings. PUBLIC COMMENTS The Draft Shelf Prospectus was filed with the Designated Stock Exchange for public comments pursuant to the SEBI Debt Regulations. The Company, thereafter, filed the updated Shelf Prospectus with the Designated Stock Exchange and undertook the issue of the first tranche of the Bonds on the terms set out in the Prospectus – Tranche 1. The Company had through letter dated December 16, 2010 filed with SEBI sought exemption from making the prospectuses for the second and subsequent tranches available for public comments for a period of seven working days in terms of Regulation 6 (2) of the SEBI Debt Regulations. SEBI has through its letter no. IMD/DF1/OW/31284/2010 dated December 28, 2010 advised that it has no objection to the proposal that only shelf offer document in respect of the proposed public issue shall be made available in terms of Regulation 6 (2) of the SEBI Debt Regulations. Accordingly the Prospectus – Tranche 2 has not been made available for public comments. LISTING The Tranche 2 Bonds offered through this Prospectus - Tranche 2 are proposed to be listed on the National Stock Exchange of India Limited (“NSE”) and the Bombay Stock Exchange Limited (“BSE”). Application for ‘in-principle’ listing approval was made to NSE and BSE through letters dated September 9, 2010 and September 9, 2010, respectively. NSE and BSE have given their ‘in-principle’ listing approval through letters dated September 23, 2010 and September 21, 2010, respectively. For the purposes of the Issue, the Designated Stock Exchange shall be NSE. LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE KOTAK ENAM SECURITIES HDFC BANK ICICI SECURITIES JM FINANCIAL IDFC CAPITAL KARVY MAHINDRA PRIVATE LIMITED LIMITED LIMITED CONSULTANTS LIMITED* COMPUTERSHARE CAPITAL 801/ 802, Dalamal Investment Banking ICICI Centre PRIVATE LIMITED Naman Chambers, C-32 PRIVATE LIMITED COMPANY Towers Division, H.T. Parekh Marg 141 Maker Chambers G-Block, Bandra- Kurla Plot no. 17-24, Vithalrao LIMITED Nariman Point 1st Floor, A-Wing, Churchgate III, Complex Nagar 1st Floor, Bakhtawar Mumbai 400 021, India Trade World, Kamla Mumbai 400 020 Nariman Point, Bandra (East), Mumbai Madhapur, Hyderabad 229 Nariman Point Tel: (91 22) 6638 1800 Mills Compound Tel: (91 22) 2288 2460 Mumbai - 400021 400 051 500 081 Mumbai 400 021 Fax: (91 22) 2284 6824 Senapati Bapat Marg, Fax: (91 22) 2282 6580 Tel: (91 22) 6630 3050 Tel: (91 22) 6622 2600 Tel: (91 40) 2342 0815 - Tel: (91 22) 6634 1100 E-mail: Lower Parel (West) Email: Fax: (91 22) 2204 2137 Fax: (91 22) 6622 2501 24 Fax: (91 22) 2284 0492 [email protected] Mumbai – 400 013 idfcbonds@icicisecuriti Email: E-mail: Fax: (91 40) 2343 1551 E-mail: Investor Grievance Tel: (91 22) 4080 4108 es.com idfcbondissue2@jmfina [email protected] Email: [email protected] Email: Fax: (91 22) 4080 4114 Investor Grievance ncial.in m [email protected] om [email protected] Email:paresh.soni@hdf Email: Investor Grievance Investor Grievance Investor Grievance Investor Grievance Website: cbank.com customercare@icicisec Email: Email: Email:idfc_infra@karvy. Email: www.enam.com Investor Grievance urities.com grievance.ibd@jmfinan [email protected] com [email protected] Compliance Officer: M. Email: Website: cial.in Website: Website: om Natrajan investor.redressal@hdf www.icicisecurities.co Website: www.idfccapital.com www.karvy.com Website: Contact Person: Sonal cbank.com m www.jmfinancial.in Compliance Officer: Contact Person: M. www.kmcc.co.in Sinha Website: Contact Person: Contact Person: Pritesh Dedhia Murali Krishna Compliance Officer: SEBI Reg. No. www.hdfcbank.com Mr. Sumit Agarwal / Ms. Lakshmi Contact Person: Cyril SEBI Registration No.: Ajay Vaidya INM000006856 Contact Person: Mr. Vishal Kanjani Lakshmanan Paul INR000000221 Contact Person: Mr. Paresh Soni Compliance Officer: Compliance Officer: SEBI Reg. No. Chandrakant Bhole Compliance Officer: Mr. Subir Saha Mr. Chintal Sakaria INM000011336 SEBI Registration. No.: Mr. Manoj Nadkarni SEBI Registration No.: SEBI Registration No.: INM000008704 SEBI Registration No.: INM000011179 INM000010361 INM000011252 *IDFC Capital Limited, which is a subsidiary of the Company, shall only be involved in marketing of the Issue. ISSUE PROGRAMME ISSUE OPENS ON ISSUE CLOSES ON January 17, 2011 February 4, 2011 The Issue shall remain open for subscription during banking hours for the period indicated above, except that the Issue may close on such earlier date or extended date as may be decided by the Board subject to necessary approvals. 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 at least three days prior to such earlier or extended date of Issue closure. TABLE OF CONTENTS DEFINITIONS AND ABBREVIATIONS .............................................................................................................I PRESENTATON OF FINANCIAL INFORMATION AND OTHER INFORMATION ............................. VI FORWARD LOOKING STATEMENTS ......................................................................................................... VII RISK FACTORS ...............................................................................................................................................