Skip to main content

Tax Free Bonds

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

Companies are expecting these issues to do well this year on relaxed norms and attractive rates " The gap between the G-Sec rate and the coupon rate has been reduced this year. Thus, the coupon rate has become attractive " Harsh Kumar Bhanwala Executive director, India Infrastructure Finance Company

WITH the government relaxing the norms for taxfree bond issuances and attractive coupon rate, companies are anticipating the issues to do well this year.

Tax-free bond issues through the private placements route have already witnessed a good response.

Rural Electrification Corporation (REC) public issue that opened on Friday was oversubscribed 1.83 times on the first day itself as per the NSE data. REC plans to raise Rs 1,000 crore, with an over-subscription option of Rs 2,500 crore. The issue closes on September 23 and is open for subscription in three tenures — 10 years, 15 years and 20 years. The taxfree coupon rate on these bonds will be 8.01 per cent, 8.46 per cent and 8.37 per cent for 10 years, 15 years and 20 years, respectively.

Retail investors will be offered the bonds at interest rates of 8.26 per cent, 8.71 per cent and 8.62 per cent, for 10 years, 15 years and 20 years, respectively.

"The private placement we did, at the same interest rates, was oversubscribed and hence, we expect good response to the tax-free bonds issue as well," Rajeev Sharma, chairman and managing director of REC had said in a press conference.

Says Harsh Kumar Bhanwala, executive director, India Infrastructure Finance Company, "The gap between the G-Sec rate and the coupon rate was more last year, which has been reduced this year. Therefore, the coupon rate has become attractive. This year, the reference rate allowed is 80 basis points less than the GSec rate two weeks prior to the issue week, compared with 115 basis points last year. Thus the effective rate comes to 12 per cent for those in the highest incometax bracket." According to the government notification, the ceiling coupon rate for AAA rated issuers shall be the reference G-Sec rate less 55 basis points in case of retail individual investors (RIIs) and reference G-Sec rate less 80 basis points in case of other investor segments. In case the rating of the issuer entity is AA+, the ceiling rate shall be 10 basis points above the ceiling rate for AAA rated entities. In case the rating of the issuer entity is AA or AA-, the ceiling rate shall be 20 basis points above the ceiling rate for AAA rated entities.

"We launched tax-free bonds under the private placement route in two tranches, both were oversubscribed and we collected Rs 1,800 crore. We would be seeking board approval on September 2 and by the end of the month would be coming out with the first tranche of the public issue of tax-free bonds. We have been autho rised to raise Rs 10,000 crore till March 2014. We may look at subsequent two tranches of private placement and three to four tranches of public issue," added Bhanwala.

"We are working on the timings of these issues and on how to reduce the expenses. Bringing out an issue in October, which is the festival season, may hit collections. Also, if other companies launch their issue at the same time, collections would get impacted," added Bhanwala.

The government has also enhanced the issue expense limit for companies to not more than 0.65 per cent of the issue size for public issue and 0.25 per cent for private placement. The issue expense would include all expenses relating to the issue like brokerage, advertisement, printing, registration, etc.

Says an official of SBI Capital Markets, "There is a fairly good demand of taxfree bonds this time as the pre-tax yield is coming to more than 12 per cent. From the REC response, it is evident that demand is high from retail investors too." Another attractive feature is that the government has done away with the `stepdown' clause. Till last year, an investor buying these bonds through the secondary market was not given the higher coupon rate offered for retail investors. The government has also allowed issuers to earmark suitable amounts within their private placement allocation for placing with sovereign wealth funds, pension and gratuity funds without the requirement of book building procedure.

According to the government notification, 40 per cent of a public issue of taxfree bonds has to be earmarked for retail individual investors and 20 per cent each for high net worth individuals, companies and qualified institutional buyers. Retail individual investors are those that invest less than Rs 10 lakh.

Last year, poor investor interest saw the 10 (authorised) public sector units raise only Rs 25,000 crore from tax-free bonds against an approval of Rs 60,000 crore. This year, the government has allowed 13 PSUs to raise Rs 48,000 crore by issuing tax-free bonds.

REC public issue that opened on Friday was oversubscribed 1.83 times on the first day itself The issue closes on Sept 23 and is open for subscription in three tenures -10, 15 and 20 years The coupon rate will be 8.01 per cent, 8.46 per cent and 8.37 per cent for 10, 15 and 20 years

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.
Read more

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli
Read more

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis
Read more

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l
Read more

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now