Yet another opportunity for Tax free Bond. In this even Retail Client can also invest as minimum Ticket size is Rs.1,00,000. The details as below :
Private Placement of Tax Free Bonds by Indian Railway Finance Corporation Ltd.
Issue Opening Date Monday October 10, 2011
Issue Closing Date Friday October 21, 2011
Pay-In Dates Monday to Friday October 10, 2011 to October 21, 2011
Deemed Date of Allotment Tuesday November 08, 2011
HIGHLIGHTS OF THE BONDS
Issuer Indian Railway Finance Corporation Ltd.
Issue Size Rs. 150 crore with an option to retain oversubscription (As per CBDT notification, IRFC can retain maximum subscription amount of upto Rs. 10,000 crore in FY 2011-12)
Instrument Secured Redeemable Non-Convertible Non-Cumulative Tax-Free Bonds in the nature of Promissory Notes
Tax Benefits The income by way of interest will be entitled to exemption from income tax under section 10 (15) (iv) (h) of Income Tax Act, 1961
Instrument Form In dematerialized form
Security Pari-passu first charge over the rolling stock assets of the Company
Credit Rating “AAA/Stable” by CRISIL, “LAAA” by ICRA and “CARE AAA” by CARE
Face Value Rs. 1,00,000/- per Bond
Issue Price At par i.e. Rs. 1,00,000/- per Bond
Minimum Subscription 1 Bond (Rs. 1,00,000/-) and in multiples of 1 Bond (Rs. 1,00,000/-) thereafter
Option Option-I Option -II
Tenure 10 Years 15 Years
Put & Call Option None None
Maturity/ Redemption At par on the expiry of At par on the expiry of 10th Year 15th Year
from the Deemed Date of Allotment
Coupon Rate 7.55% p.a. 7.77% p.a.
Interest Payment Annual Annual
Interest Payment Date October15, every year till maturity October 15, every year till maturity
Pre-Tax Yield May be subjective and may vary from case to case. However some sample illustrations of pre-tax yield are given below.
Listing Proposed on the Wholesale Debt Market (WDM) Segment of National Stock Exchange of India Ltd. (NSE)
Trustee Indian Bank
Interest on Application Money At the respective coupon rate (subject to deduction of tax at source, as applicable) will be paid to the eligible investors from the date of realization of subscription money up to one date prior to the Deemed Date of Allotment
Who can apply: Resident Individuals, Companies, Bodies Corporate, Scheduled Commercial Banks, Financial Institutions, Insurance Companies, Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI), Regional Rural Banks, Mutual Funds, Provident, Gratuity, Superannuation and Pension Funds, and any other investor authorised to invest in these bonds, subject to confirmation from the Issuer
IRFC – BACKGROUND
Financing arm of the Indian Railways
Notified as a Public Financial Institution under Section 4A of the Companies Act, 1956
Registered as a NBFC-ND-IFC (Infrastructure Finance Company) with Reserve Bank of India
100% shareholding held by Government of India
Consistently profit making Public Sector Undertaking
Consistently rated ‘AAA’ by CRISIL, ICRA and CARE
Impeccable track record of funding rolling stock asset creation worth Rs. 60,163 crore (5,060 locomotives, 32,115 passenger coaches and 1,39,659 freight cars) for Indian Railways so far, besides providing funding support of Rs. 2,294 crore to other Railway entities such as Rail Vikas Nigam Ltd., Rail Tel Corporation of India Ltd. etc
Capital Adequacy Ratio of 160.70% as on March 31, 2011
Return on Assets of 1.11% for the year ended March 31, 2011
SAMPLE ILLUSTRATIONS FOR COMPUTATION OF PRE TAX YIELD
(assuming that investment is made out of owned funds)
1. FOR BANKS & CORPORATES
Tenure 10 Years 15 Years
Coupon Rate 7.55% 7.77%
Pre-Tax Yield (assuming tax rate of 33.15%)
Income Tax @ 30%; Surcharge @ 7.50%; Education Cess @ 3.00% *
11.29% for 10 years & 11.62% for 15 years
2. FOR INDIVIDUALS
Tenure 10 Years 15 Years
Coupon Rate 7.55% 7.77%
Pre-Tax Yield
a. Tax Slab @ 10% plus Surcharge @ 3% *
8.42% for 10 years & 8.66% for 15 years
b. Tax Slab @ 20% plus Surcharge @ 3% *
9.51% for 10 years & 9.79% for 15 years
c. Tax Slab @ 30% plus Surcharge @ 3% *
10.93% for 10 years & 11.24% for 15 years
Private Placement of Tax Free Bonds by Indian Railway Finance Corporation Ltd.
Issue Opening Date Monday October 10, 2011
Issue Closing Date Friday October 21, 2011
Pay-In Dates Monday to Friday October 10, 2011 to October 21, 2011
Deemed Date of Allotment Tuesday November 08, 2011
HIGHLIGHTS OF THE BONDS
Issuer Indian Railway Finance Corporation Ltd.
Issue Size Rs. 150 crore with an option to retain oversubscription (As per CBDT notification, IRFC can retain maximum subscription amount of upto Rs. 10,000 crore in FY 2011-12)
Instrument Secured Redeemable Non-Convertible Non-Cumulative Tax-Free Bonds in the nature of Promissory Notes
Tax Benefits The income by way of interest will be entitled to exemption from income tax under section 10 (15) (iv) (h) of Income Tax Act, 1961
Instrument Form In dematerialized form
Security Pari-passu first charge over the rolling stock assets of the Company
Credit Rating “AAA/Stable” by CRISIL, “LAAA” by ICRA and “CARE AAA” by CARE
Face Value Rs. 1,00,000/- per Bond
Issue Price At par i.e. Rs. 1,00,000/- per Bond
Minimum Subscription 1 Bond (Rs. 1,00,000/-) and in multiples of 1 Bond (Rs. 1,00,000/-) thereafter
Option Option-I Option -II
Tenure 10 Years 15 Years
Put & Call Option None None
Maturity/ Redemption At par on the expiry of At par on the expiry of 10th Year 15th Year
from the Deemed Date of Allotment
Coupon Rate 7.55% p.a. 7.77% p.a.
Interest Payment Annual Annual
Interest Payment Date October15, every year till maturity October 15, every year till maturity
Pre-Tax Yield May be subjective and may vary from case to case. However some sample illustrations of pre-tax yield are given below.
Listing Proposed on the Wholesale Debt Market (WDM) Segment of National Stock Exchange of India Ltd. (NSE)
Trustee Indian Bank
Interest on Application Money At the respective coupon rate (subject to deduction of tax at source, as applicable) will be paid to the eligible investors from the date of realization of subscription money up to one date prior to the Deemed Date of Allotment
Who can apply: Resident Individuals, Companies, Bodies Corporate, Scheduled Commercial Banks, Financial Institutions, Insurance Companies, Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI), Regional Rural Banks, Mutual Funds, Provident, Gratuity, Superannuation and Pension Funds, and any other investor authorised to invest in these bonds, subject to confirmation from the Issuer
IRFC – BACKGROUND
Financing arm of the Indian Railways
Notified as a Public Financial Institution under Section 4A of the Companies Act, 1956
Registered as a NBFC-ND-IFC (Infrastructure Finance Company) with Reserve Bank of India
100% shareholding held by Government of India
Consistently profit making Public Sector Undertaking
Consistently rated ‘AAA’ by CRISIL, ICRA and CARE
Impeccable track record of funding rolling stock asset creation worth Rs. 60,163 crore (5,060 locomotives, 32,115 passenger coaches and 1,39,659 freight cars) for Indian Railways so far, besides providing funding support of Rs. 2,294 crore to other Railway entities such as Rail Vikas Nigam Ltd., Rail Tel Corporation of India Ltd. etc
Capital Adequacy Ratio of 160.70% as on March 31, 2011
Return on Assets of 1.11% for the year ended March 31, 2011
SAMPLE ILLUSTRATIONS FOR COMPUTATION OF PRE TAX YIELD
(assuming that investment is made out of owned funds)
1. FOR BANKS & CORPORATES
Tenure 10 Years 15 Years
Coupon Rate 7.55% 7.77%
Pre-Tax Yield (assuming tax rate of 33.15%)
Income Tax @ 30%; Surcharge @ 7.50%; Education Cess @ 3.00% *
11.29% for 10 years & 11.62% for 15 years
2. FOR INDIVIDUALS
Tenure 10 Years 15 Years
Coupon Rate 7.55% 7.77%
Pre-Tax Yield
a. Tax Slab @ 10% plus Surcharge @ 3% *
8.42% for 10 years & 8.66% for 15 years
b. Tax Slab @ 20% plus Surcharge @ 3% *
9.51% for 10 years & 9.79% for 15 years
c. Tax Slab @ 30% plus Surcharge @ 3% *
10.93% for 10 years & 11.24% for 15 years
