Public issue of long term infrastructure bonds by Power Finance Corporation

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Public issue of long term infrastructure bonds by Power Finance Corporation. Investment upto a maximum of Rs.20,000 in these bonds is eligible for deduction u/s 80CCF of the Income Tax Act for the Financial Year 2010-11. An Individual or HUF can avail of this benefit in addition to the limit of Rs.1 Lakh u/s 80C.

 

Public issue of long term infrastructure bonds by Power Finance Corporation’s Salient Features of the Issue:

  • Public Issue of bonds in the nature of secured, redeemable NCDs by Power Finance Corporation.
  • The bonds are rated AAA/Stable by CRISIL and AAA/Stable Outlook by ICRA
  • The bonds are secured with a charge on the book debts of the Company along with identified immovable propert
  • The Bonds offer an attractive yield 8.50-8.75% p.a. along with tax benefits under section 80 CCF
  • The bonds will be issued in Physical or Demat Form
  • No TDS applicable on bonds issued in Demat form
  • The bonds will be listed on BSE and can be traded after the expiry of 5 year lock-in period
  • The bonds will have a buy-back option at the end of 5 years and 7 years
  • The bonds have a face value of Rs.5,000 each and the minimum application is 1 bond

 

Public issue of long term infrastructure bonds by Power Finance Corporation Company Profile:

PFC is a Navratna Government of India undertaking (73.72% equity shareholding held by GOI). It was set up in July 1986 as a specialized financial institution dedicated to Power sector financing and committed to the integrated development of the power and associated sectors. It provides large range of financial products and services such as Project Term Loan, Lease Financing, Direct Discounting of Bills, Short Term Loan, Consultancy Services etc. for various power projects in generation, transmission, distribution sector as well as for renovation & modernisation of existing power projects. The company reported a top line growth of 27% during FY 2011 to Rs. 10,128 Cr against Rs. 8,002 Cr in the previous year. Profits grew by 11% to Rs. 2,620 Cr in FY 2011 over the previous fiscal.

 

Illustration:

 

Series

I

II

III

IV

Interest Payment Frequency

Annual

Cumulative

Annual

Cumulative

Coupon (p.a)

8.50%

8.50%

8.75%

8.75%

Tenor (Yrs)

10

10

15

15

Issue Price

At Par

At Par

At Par

At Par

Buy Back Options

5 Years

5 Years

7 Years

7 Years

Maturity Amount (Rs)

5,000 per bond and accrued interest from the last date of interest paid till the maturity date

11,305 per bond and interest on application interest compounded annually at 8.50%

5,000 per bond and accrued interest from the last date of interest paid till the maturity date

17,596 per bond and interest on application interest compounded annually at 8.50%

Buy Back Amount (Rs)

5,000 per bond + accrued interest

7,519

5,000 per bond + accrued interest

8,995

 

The issue opens on Sep 29, 2011 and closes on Nov 04, 2011.

Public issue of long term infrastructure bonds by Power Finance Corporation is good opportunity for long term investors.

TIJARIA POLYPIPES LTD IPO

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Comments

  1. ASRINIVAS says:

    pLEASE SEND THE SOFT COPY OF THE APPLICATION ,SO THAT THE REQUIRED AMOUNT WILL BE PAID ,alongwith the application as we do not have demat a/c.
    regards

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