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Friday, December 30, 2011

IFCI Long Term Infrastructure Bonds for year 2011 - 2012

 
Issuer
IFCI Limited ("the Issuer")
Offering
2,00,000 Nos. Unsecured, Redeemable, Non-Convertible Bonds Series – IV of Rs.5,000/- each aggregating to Rs.100 crore with a green-shoe option to retain over-subscription.
Type
Private Placement basis
Instrument
Unsecured, Redeemable, Non-Convertible Long Term Infrastructure Bonds - Series IV, having benefits under section 80 CCF of the Income Tax Act, 1961 for investment upto Rs.20,000/-
Eligible Investors
Resident Indian Individuals (Major) and HUFs through Karta of the HUF
Rating
'BWR AA-' by Brickwork Ratings India Pvt. Limited CARE 'A+' by CARE Ratings (Credit Analysis & Research Ltd.) 'LA' by ICRA Limited
Face Value
Rs.5,000/- per bond
Minimum Application
Rs.5,000/- (i.e. 1 Bond)
Application in multiples of
Rs.5,000/- (i.e. 1 Bond)
Options for Subscription
I
II
III
IV
 
Frequency of Interest Payment
Cumulative
Annual
Cumulative
Annual
 
Coupon (% p.a.)
9.09 % p.a.
(Annual compounding)
9.09 % p.a.
9.16 % p.a.
(Annual compounding)
9.16 % p.a.
 
Tenor
10 (Ten) years
10 (Ten) years
15 (Fifteen) years
15 (Fifteen) years
 
Maturity Date
February 15, 2022
February 15, 2022
February 15, 2027
February 15, 2027
 
Buyback option
At the end of 5th and 7th year from Deemed Date of Allotment
At the end of 5th and 10th year from Deemed date of Allotment
 
Buyback Dates
February 15 of the calendar years 2017 and 2019
February 15 of the calendar years 2017 and 2022
 
Lock-in period
5 years from the deemed Date of Allotment
Deemed Date of Allotment
February 15, 2012
Security
Unsecured
Trustee
IDBI Trusteeship Services Limited
Listing
Proposed to be listed on Bombay Stock Exchange (BSE)
Depositories
National Securities Depository Ltd. and Central Depository Services (India) Ltd.
Registrars
Karvy Computershare Pvt. Ltd.
Issuance & Trading
Bonds shall be issued both in dematerialised form and physical form. However, trading allowed only in dematerialised mode after the expiry of Lock-in Period of 5 years
Mode of Interest Payment / Redemption
ECS/At Par Cheques/Demand Drafts
Issue Schedule
Issue Open Date : November 30, 2011
Issue Close Date : January 16, 2012
The issuer would have the right to pre-close the issue or extend the closing date by giving 1 day notice to the Arrangers
Interest on Application Money shall be paid at the respective coupon from the date of realisation of subscription amount to the date immediately preceding the deemed date of allotment.
 

 

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Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

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Non-Convertible Debentures

High returns accompanied by a high-risk level
 

Muthoot Finance's second non-convertible debenture (NCD) issue this year opened last week and would be available till January 7. Several others like L&T Finance, Shriram Transport and Tata Capital plan to follow soon.

The investment tenure here varies from two to five and a half years and requires a minimum investment of ~5,000. The annual returns range from 13-13.43 per cent, varying across tenures. The returns, this time, are up from those offered during the previous issue (12 per cent) that opened earlier this year, and is possibly the highest being offered by any debt instrument in the market right now.

An NCD is a type of loan issued by a company that cannot be converted into stock. They offer high returns, but are risky instruments and may not suit all investors. Liquidity is another issue. In a rising interest regime, getting out of a bank deposit may be easier than liquidating your NCD investment, because these are listed on stock exchanges, and may have to be sold at a discount if there aren't many trades happening.

As compared to bank fixed deposits, the returns are higher by almost three-four per cent. Currently, State Bank of India (SBI) is giving 9.25 per cent for deposits between one and ten years.

Gilt funds are another option. These invest in long-term government securities. Since many believe the interest rate cycle is near its peak, locking in funds is advisable. Plus, even if the interest rates start moving down, you will benefit through capital appreciation. Over a five-year period this category has returned seven per cent, according to Value Research, a mutual rating agency.

All these returns are pre-tax, though. The interest earned on the NCDs and bank deposits will be added to your income and taxed according to slab. So, for those falling in the highest tax bracket, the effective returns for NCDs would be 9.25 per cent (for 13.43 per cent return). For fixed deposits, these would be at 6.4 per cent.

Comparatively, gilt funds will be more tax efficient, with capital gains taxed at 10 per cent and 20 per cent, with and without indexation, respectively.

The higher returns of NCDs, however, require ahigher risk appetite. Reason: Though the returns are locked in and the issue secured, there is always the risk of default. Typically, the company would earmark assets against the amount raised. So, these can be liquidated to pay off the borrowers in dire situation. This is small respite. If the overall business fails, the earmarked security can also be compromised and the investor will get nothing.

In this NCD issue, investors can consider investing a small portion in the shorter tenure (two-year) option, according to Malhar Majumder, director, Gliese Consulting, to cap any risk involved, and take advantage of the high returns.

Thus, any decision for investing in this or further NCD issues must be taken after evaluating the business fundamentals or the business model of the company. You can look at the credit rating assigned to the issue for guidance. For instance, the rating assigned to the Muthoot Finance issue is AA-/Stable by Crisil, implying high safety, with the minus sign reflecting comparative standing within the category.
 

How to apply to NHAI Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

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Tax free infra bonds worth Rs 20,000 crore are lined up by March

Download PFC Tax Free Bond Application Forms

Download PFC Tax Free Bond Application Forms

 
IT IS raining tax-free bonds in India. Following the launch of Rs 10,000 crore tax-free bond issue by the National Highway Authority of India (NHAI), three more state-owned firms are lining up to issue around Rs 20,000 crore worth of tax-free bonds in the next quarter.

While the Indian Railway Finance Corporation (IRFC) is in the final stages of launching a Rs 10,000 crore tax-free bond issue, Power Finance Corporation (PFC) is coming out with a Rs 5,000 crore tax-free bond issue. Public sector firm, Housing and Urban Development Corporation (Hudco), will launch a Rs 5,000 crore bond issue as early as January 2012.

PFC and Hudco have already made private placements in October worth Rs 900 crore and Rs 400 crore, respectively, at interest linked to government securities yields on similar tenure securities in September.

Hudco, the company would launch the bonds by the middle of January 2012. The coupon rate would be based on the December-end government securities (G-Sec) rates. "We have already placed around Rs 400 crore as private placement out of the total Rs 5,000 crore we expect to mobilise.

Hudco and PFC both have offered 7.62 per cent for 10-year bonds and 7.83 per cent for 15-year bonds through the private placement route in October.
The coupon rates on taxfree bonds under private placement were around a percentage point lower than the annualised closing yield on government bonds in September.

IRFC, the financing arm of Indian Railways, has also received a man date to raise Rs 10,000 crore via issuance of taxfree bonds and it is also expected to enter the market next month.

Rajesh Kumar Khullar, joint secretary at the union ministry of finance, said he expects IRFC's issue to be preceded by the PFC issue. "We see the market conditions to be good for such bonds and expect the issues to get over in as short a time as possible, may be, in less than a week," he said.

Financial planners said these bonds are particularly appealing to high net worth investors who fall in the highest tax bracket because they can earn a tax free income. Besides, the listing of these bonds on the stock exchange will provide liquidity and possible capital appreciation once the interest rates start going down again.

This is the first time that retail participation has been allowed in tax free infrastructure bonds. We wanted everyone to enjoy the benefits of steady and stable long-term returns. Earlier, all these bonds were privately placed and would not be open for retail investors. Now, investors can invest a minimum sum of Rs 50,000 in these bonds.
 

How to apply to PFC Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

 

NHAI tax-free bond issue subscribed two times

The public issue of tax-free bonds by the National highways Authority of India (NHAI) has been subscribed by almost two times on the first day, according to merchant bankers.

The subscription for ~10,000 crore of tax-free bonds, which opened today, may close by Friday, instead of the scheduled closure on January 11. SBI Capital Markets, A KCapital, Kotak Mahindra Bank, and ICICI Securities are the lead managers for the issue. The bonds have been rated 'AAA' by Crisil, CARE and Fitch.

NHAI had the option of either closing the issue after a minimum of three days, or extend it by 30 days.

NHAI received ~12,000 crore against ~4,000 crore reserved for qualified institutional investors, ~6,000 crore against ~3,000 crore reserved for high net worth individuals and ~1,000 crore against ~3,000 crore reserved for the retail segment.

JN Singh, member (finance), NHAI, said the response for the issue was overwhelming. "The issue may be closed before schedule, if it is oversubscribed," he said. He, however, did not confirm the figures. NHAI had received the ministry's approval to raise up to ~10,000 crore through the sale of tax-free bonds in the current financial year.

The bonds carry a coupon rate of 8.2 per cent on 10-year maturities and 8.3 per cent on 15-year maturities. The coupon rate on these bonds is not taxable, and should not be less than 50 basis points lower than the yield on government securities of the same residual maturity, as reported by the Fixed Income Money Market and Derivatives Association on the last working day of the month preceding the month of the issue.

In case the companies choose to place the bonds privately, the coupon rate on the bonds would not be less than 100 basis points lower than the yield on government securities of the equivalent residual maturity.

In the 2011-12 Union Budget, approvals were given to NHAI, Housing Urban Development Corporation (Hudco), Indian Railway Finance Corporation (IRFC) and Power Finance Corporation (PFC) to raise ~30,000 crore through tax-free bonds. While Hudco and PFC have already issued these bonds, IRFC is yet to tap the debt market with these instruments.

Good response may allow the authority to close the issue this week

The bonds carrya coupon rate of8.2 per centon 10-year maturities and 8.3 per centon 15-year maturities
 
 
How to apply to PFC Tax Free Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

 

ICICI Prudential Fixed Maturity Plan Series 60-27 months Plan I

ICICI Prudential Mutual Fund has launched a new fund named as ICICI Prudential Fixed Maturity Plan Series 60-27 months Plan I. The new issue will be close for subscription January 9.

How to apply to NHAI Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

 

National Highways Authority Tax Free Infra Bonds

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UNFAZED by uncertainty in the capital markets, the National Highways Authority of India (NHAI) will launch its first ever tax-free bonds issue of Rs 10,000 crore on December 28.

The issue will close on December 30, a senior road transport ministry official said.

The official further said the interest (coupon) rate of the bonds issue will be between 8 and 8.5 per cent, while refusing to disclose the exact number.

"A formal announcement will be made by road transport minister CP Joshi and you should wait for that," the official said, adding that the money raised from it will be used to partly finance various national highways projects under different government schemes.

"Some money will also be used for viability gap funding for BOT (build-operate transfer) road contracts," the official added.

As per the prospectus filed by NHAI with the market regulator, the Securities and Exchange Board of India (Sebi), the bonds will have two maturity periods of 10 and 15 years, and would get listed on the BSE and the National Stock Exchange.

In this year's budget, the government had allowed NHAI to raise Rs 10,000 crore from the tax-free bonds, an instrument never used by it earlier. Till now, it used to raise funds through issue of 54EC bonds, under which subscribers can claim exemption of capital gains tax.

Citing the provisions of income tax rules, the NHAI prospectus has, however, clarified that only the interest earned on the new bonds will be tax-free, not the actual investments.

Moreover, investors will be liable to pay capital gains tax as applicable, it further said.

According to the NHAI prospectus, the bonds issue will worsen its debt-to-capital ratio from 0.11 to 0.29 if it raises Rs 10,000 crore from the markets. The debt-to capital ratio reflects the financing strengths of a firm.

Higher the ratio, the more debt the company has, compared to its equity.

As of June 30, the NHAI's total debt (including secured loans) stood at Rs 6,636.21 crore.

The bond issue has got AAA (stable) rating from the three agencies — Crisil, CARE and Fitch.

SBI Caps, ICICI Securities, Kotal Mahindra Capital and AK Capital Services have been appointed as the lead managers by the NHAI for the bonds issue.
 
How to apply?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

If you have Missed the NHAI Bonds, PFC Tax Free bonds is open now

National Highways Authority of India's ongoing tax-free bond issuance may be a befitting end to this year of debt. Sources involved with the issuesay it has been subscribed to the tune of more than ~20,000 crore. Tomorrow may, therefore, be the last chance for retail investors to partake in the issue.

Investors who missed this issue can take heart, though. For, Power Finance Company (PFC) is opening its issue on Friday. PFC is offering similar rates as NHAI: Annual taxfree returns of 8.2 and 8.3 per cent for 10 and 15 years, respectively. The minimum investment will, however, be lower at ~10,000, as against NHAIs ~50,000.

Do not confuse these issues with tax-saving bond by the likes of IDFC and L&T. The taxsaving bonds allow investors to claim a deduction of up to ~20,000 under Section 80CCF. But the interest earned thereon is taxable.

In the case of NHAI bonds, there is no deduction on the principal available. However, the interest earned will be completely tax-free under Section 10(15)(iv)(h).

Lets say you invest ~50,000 for a 10-year tenure. You will earn ~4,100 annually (there is no cumulative interest option), that is ~41,000 over 10 years, entirely tax-free. Compare this with a 10-year bank fixed deposit. State Bank of India (SBI) is currently offering 9.25 per cent return annually. For the same investment amount, here you will earn ~4,625 yearly. However, this will be taxable. For those in the highest tax bracket, the return in hand after deducting tax will be ~3,196, almost ~1,000 less than that earned from NHAI bonds.

Certified financial planner Suresh Sadagopan is advising clients falling in the highest tax bracket to consider the issue. Even those looking at fixed income investments from an asset allocation perspective can consider this. Especially since the rates will be locked in at investment. Unlike other small savings instruments like Public Provident Fund (PPF), Post Office Monthly Income Schemes and National Savings Certificates that have been linked to 5- or 10-year government bond yields and will, as aresult, vary every year.

So, though an 8.6 per cent annual taxfree return on PPF with or without the tax deduction sounds enticing, it may not be offered from next year. More, with talk of the interest-rate cycle having peaked, rates may start sliding.

Also, PPF is quite illiquid, with a lock-in of six years and even post that, the withdrawal amounts allowed every year are capped. Comparatively, NHAI bonds will be liquid, as they will be listed on the exchanges, providing investors an exit route. That is, there is no lock-in period. If these bonds list at a premium, one can cash on the listing gains as well. But, this is not advisable for long-term investors.

Plus, once the rate cycle reverses, there may be a higher demand for these bonds and there will be scope for capital appreciation.

One can even consider making trading gains by exiting the bonds mid-way. Be careful, though, as there will be a capital gains tax in this case.

If the bonds are sold within a year, then the gains will be added to your income and taxed. If held for more than a year before sale, the capital gains will be taxed at 10 per cent without indexation or 20 per cent with indexation.

Investors who missed the NHAI issue can take heart. For, Power Finance Company (PFC) is also opening its issue tomorrow. It is offering similar rates as NHAI
 
 

How to apply to Power Finance Company Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

NHAI bond oversubscribed

 THE first issue of tax-free bonds to the general public in over five years has received a good response with bids for the issue crossing the greenshoe mark as well. National Highways Authority of India's (NHAI) Rs 5,000 crore issue of tax-free bonds with a greenshoe option of another Rs 5,000 crore has been oversubscribed twice over.

Till the end of Wednesday, we received total application money of Rs 23,000 crore, however, the retail investor bucket was still trailing at around Rs 628 crore out of the total limit of Rs 3,000 crore.

"We want to keep the window open for the retail investors so that they can benefit out of this golden opportunity of stable return for the next 10 to 15 years," said AJ Singh, director finance at NHAI.

The success is attributed to the huge interest shown by high net worth investors and companies in investing in a quasi-sovereign body that offers very good post-tax returns without much credit risk. The last public issue of such tax-free bonds was the 6.5 per cent tax-free bond on tap issuance managed by the Reserve Bank of India (RBI) in the early half of the previous decade. With a first come first serve allotment process for non-retail bidders, the issue, which has galvanised the so far moribund investment banking community, seems to have garnered an excellent response. Experts said the response il lustrates the large amount of savings waiting on the sidelines for a suitable investment opportunity.

NHAI has offered a coupon rate of 8.20 per cent for 10 years and 8.30 per cent on the 15-year bond. While this is lower than the present rates on the public provident fund (PPF), there is no variability of coupon year on year like the PPF. Also, since these bonds will be listed on the stock exchange and are being issued for a substantially large amount, they are expected to enjoy good liquidity due to the zero lock in nature.

Markets, said that the similar issues, which are lined up from PFC, HUDCO and Indian Railway Finance Corporation (IRFC), are expected to get a good response from investors as they provide stable returns over longer period.

IRFC will launch Rs 10,000 crore tax-free bonds while Power Finance Corporation (PFC) is coming out with Rs 5,000 crore tax-free bonds, and Housing and Urban Development Corporation (HUDCO) will launch another Rs 5,000 crore bond, between now and end January 2012, said investment bankers.

 


How to apply to NHAI Bonds?

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

 

Kotak Hybrid Fixed Term Plan Series-I

Kotak Mutual Fund today said it will launch a new fund offer (NFO) tomorrow that aims to generate income by investing in debt, equity and money markets. The minimum investment in Kotak Hybrid Fixed Term Plan Series-I will be . 10,000 and the fund will close on January 12. The close-ended scheme has a maturity period of 24 months. Hybrid schemes offer low risks as the income earned from debt instruments helps to alleviate the risk associated with equity and equity-related instruments. Investors who aim to seek returns which are potentially higher than traditional deposit instruments and are tax-efficient should allocate some of their funds to such hybrid schemes.

 

Download to NHAI Bonds Application Form

You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you

 

 

---------------------------------------------

 

Application form for Applying for Tax Saving Long Term Infrastructure Bond  

 

Current open Long Term Infra Bond Application form

 

 

Submit filled up application    Collection canter near you

 

 

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

 

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

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