Tax Free Bond 2013-14 Complete Overview
Several Tax Free Bond Issue launched this year. Everyone know all about issue when they are invested. After some time everybody forgot when interest credit in bank account. Can I sell this bond. Any lock-in period for my particular Bonds. Script code for particular bonds. Current Market traded price. And many more question.
So I decided to make one post for it. I am collecting all data from 1 Apr 2013 to 31 Mar 2014 Tax Free Bond Issue open in this period.
All data collected for my personal use. I am not responsible for any mistake in this post. If any correction & addition in this post. Comment your suggestion..
Central Board of Direct Taxes (CBDT) vide Notification dated 8th August 2013 authorises the entiites mentioned in table below, to issue, during financial year 2013-14, Tax Free, secured, redeemable, non-convertible bonds, aggregating to Rs. 48,000 crore.
Eligibility: The following shall be eligible to subscribe to the bonds:-
(a) Retail Individual Investors (RIIs); (Limit upto 10 lakhs)
(b) Qualified Institutional Buyers (QIBs);
(c) Corporates : including statutory corporations, trusts, partnership firms, limited liability partnerships, cooperative banks, regional rural banks and other legal entities, subject to compliance with their respective applicable legislations; and
(d) High Net worth Individuals (HNIs). (Above 10 lakhs)
Rate of interest:
1. There shall be a ceiling on the coupon rates based on the reference Government security (G-sec) rate.
2. The reference G-sec rate shall be the average of the base yield of G-sec for equivalent maturity reported by Fixed Income Money Market and Derivative Association of India (FIMMDA) on a daily basis (working day) prevailing for two weeks ending on Friday immediately preceding the filing of the final prospectus with the Exchange or Registrar of Companies (ROC) in case of public issue and the issue opening date in case of private placement.
3. The ceiling coupon rate for AAA rated issuers shall be the reference G-sec rate less 55 basis points in case of RIIs and reference G-sec rate less 80 basis points in case of other investor segments referred to at (b),(c) and (d) of paragraph 1 above.
4. 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 as given in clause(3) .
5. 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 as given in clause(3).
6. These ceiling rates shall apply for annual payment of interest and in case the schedule of interest payment is altered to semi-annual, the interest rates shall be reduced by 15 basis points.
7. The higher rate of interest, applicable to RIIs, shall not be available in case the bonds are transferred by RIIs to non retail investors.
1. At least 70 per cent of the aggregate amount of bonds issued by each entity shall be raised through public issue and the same shall not be applicable in case of entities where the aggregate amount of bonds as per column (3) of the table is less than rupees five hundred crore.
2. 40 per cent of such public issue shall be earmarked for RIIs.
|Code||Issuer||Allocated Amt||Subscribe||Balance Issue|
|1||AAI||Airport authority of India Ltd.||500||NIL||250|
|2||CSL||Cochin Shipyard Ltd.||250||NIL||250|
|3||EPL||Ennore Port Ltd.||500||NIL||500|
|4||HUDCO||Housing and Urban Development Corporation Ltd.||10,000||4720||5280|
|5||IREDA||Indian Renewable Energy Development Agency Ltd.||1,000||NIL||1,000|
|6||IRFC||Indian Railway Finance Corporation Ltd.||10,000||10000||nil|
|7||IIFCL||Indian Infrastructure Finance Co. Ltd.||10,000||7,176.21||2823.79|
|8||NHB||National Housing Bank||3,000||3000||Nil|
|9||NHAI||National Highways Authority of India||5,000||5000||NIL|
|12||PFC||Power Finance Corporation Ltd.||5,000||5,000||NIL|
|13||REC||Rural Electrification Corporation Ltd||5,000||5,000||NIL|
|Total (Figure in Cr.)||48,000||30750||22250|
|Issuer||Open Date||Close Date||Registrar||Link|
|IRFC -II||28 Feb 2014||Karvy||Allotment|
|REC - II||28 Feb||14 Mar||Karvy||Allotment|
|Ennore||18 Mar||14 Mar||Karvy||Allotment|
|IIFCL III||17 Feb||14 Mar||Karvy||Allotment|
|HUDCO III||28 Feb 2014||13 Mar 2014||Karvy||Allotment|
|IREDA||17 Feb 2014||4 Mar 2014||Link Intime||Allotment|
|NHAI||15 Jan 2014||27 Jan 2014||Karvy||Allotment|
|IRFC||6 Jan 2014||7 Feb 2014||Karvy||Allotment|
|IIFCL -Tranche II||9 Dec 2013||10 Jan 14||Karvy||Allotment|
|Hudco -Tranche II||2 Dec 2013||1 Jan 14||Karvy||Allotment|
|NHB||30 Dec 13||2 Jan 14||Karvy||Allotment|
|NTPC Tax Free Bond||3 Dec 2013||5 Dec 2013||Karvy||Allotment|
|NHPC Tax Free Bond||18 Oct 2013||23 Oct 2013||Karvy||Allotment|
|PFC Tax Free Bond||14 Oct 2013||5 Nov 2013||Karvy||Allotment|
|IIFCL Tax Free Bond||03 Oct 2013||31 Oct 2013||Karvy||Allotment|
|HUDCO Tax Free Bond - Tranche I||17 Sep 2013||14 Oct 2013||Karvy||Allotment|
|REC Tax Free Bond- Tranche I||30 Aug 2013||17 Sep 2013||Karvy||Allotment|
Shortly Update current tradable price table
Tax Free Bonds Interest Payment Table
|Sr. No||Issuer||IP Date *||Deemed Date||Listing Date|
|1||REC||Dec 1, Every Year||24 Sep 2013||30 Sep 13|
|2||HUDCO Tranche I||Oct 25, Every Year||25 Oct 2013||29 Oct 13|
|3||IIFCL Tranche I||12 Nov, Every Year||12 Nov 2013||14 Nov 13|
|4||PFC||16 Nov , Every Year||16 Nov 2013||20 Nov 13|
|5||NHPC||1 April Every Year||2 Nov 2013||7 Nov 13|
|6||HUDCO Tranche II||13 Jan , Every Year||13 Jan 2014||17 Jan 14|
|7||NTPC||16 Dec, Every Year||16 Dec 2013||19 Dec 13|
|8||IIFCL Tranche II||22 Jan,||22 Jan 2014||24 Jan 14|
|9||NHB||13 Jan||13 Jan 2014||16 Jan 14|
Tax Free Bond appeal to investor who are looking for fixed and safe returns keeping the risk level as the same as that of a Bank FD. Tax Free Interest TFB scores over a Bank FD since the interest is Tax Free in the hand of investor (TDS not deducted on interest). It is not included in the your total income while filling income tax returns.
Pre Tax Returns are Very Attractive
|Options||Tax Free Bond Coupon||Tax Bracket 10.30 %||Tax Bracket 20.60%||Tax Bracket 30.90%|
|10 Years||8.43 %||9.40 %||10.62 %||12.20 %|
|15 Years||8.79 %||9.80 %||11.07 %||12.72 %|
|20 Years||8.92 %||9.94 %||11.23 %||12.91 %|
Safety :TFB are issued by PSUs and come with the high credit rating.
Tradable Listing on stock exchanges, freely tradable on stock exchange.
Retail Preference TFB given higher coupon to retail investor.
Format : Option of holding bonds in ” Demat Form ” as well as ” Physical Form” – easy to handle and monitor.