National Highways Authority of India NHAI Tax-free Bond

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National Highways Authority of India NHAI Tax-free Bond Issue

Investment Opportunity:

Interest rates are at peak level; best time to invest in fixed income tax free instruments.

National Highways Authority of India NHAI Tax-free Bond Interest rate cycle has peaked out
given the sharp slowdown in the industrial activity and softening of the food inflation, the interest rate cycle has peaked out. Reserve Bank of India has restrained from increasing the interest rates in the last policy review meet and is expected to begin reducing rates in March or April 2012.

National Highways Authority of India NHAI Tax-free Bond yields correct sharply
The bond yields which had increased close to 9% levels have corrected significantly to around 8.3% which shows easing of pressure on rates. The banks have also kept their demand deposit rates stable since past couple of months despite the increasing policy rates.

National Highways Authority of India NHAI Tax-free Bond-High post tax yield for triple A rated product
Tax free bond with yield of 8.2-8.3% is comparable with yields offered on government bonds and offer extremely attractive pre-tax yield close to 12% for a long period of time. The bond issue has got AAA (stable) rating from the three agencies — Crisil, CARE and Fitch. The bonds would also be listed and tradable on NSE/BSE.

About NHAI:
National Highways Authority of India (Authority) is an autonomous organization of Government of India and was constituted mainly to survey, develop, maintain and manage the National Highways, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it, to regulate and control the plying of vehicles, to develop and provide consultancy and construction services and to collect fees for services or benefits rendered in accordance with Section 16 of the NHAI Act. As per NHAI Act, 1988, certain stretches of National Highways have been entrusted to NHAI by the Government for development, maintenance and management.

Important dates for National Highways Authority of India NHAI Tax-free Bond

Issue Opening Date 28-Dec-2011

Issue Closing Date January 11, 2012, except that the Issue may close at the close of banking hours on the dates specified, with an option for early closure or extension by such period, upto a period of 30 days from the date of opening of the Issue, as may be decided by the Board of NHAI subject to necessary approvals. In the event of such early closure of the subscription list of the Issue, NHAI shall ensure that public notice of such early closure is published on or before the day of such early date of closure through advertisement/s in a leading national daily newspaper. Further, Allotment shall be on first cum first serve basis for Category I and II and proportionate basis for Category III, with NHAI having the discretion to close the issue early irrespective of whether or not any of the Portion(s) are fully subscribed.

Important dates for National Highways Authority of India NHAI Tax-free Bond Details

Tranche Series-I Series-II
Tenor 10 Years 15 Years
Face Value Rs1,000/- per bond Rs1,000/- per bond
Issue Price At par i.e. Rs1,000/- per bond At par i.e. Rs1,000/- per bond
Coupon Rate 8.20% p.a. 8.30% p.a.
Interest Payment Annual Annual
Put & Call Option None None
Redemption Amount (Rs./ Bond) Repayment of the Face Value plus any interest that may have accrued at the Redemption Date Repayment of the Face Value plus any interest that may have accrued at the Redemption Date
Credit Rating “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE and “Fitch AAA(ind)” by FITCH
Mode of Holding Dematerialized as well as in physical form
Minimum Application 50 bonds (Rs50,000/-) and in multiples of 1 bonds (Rs1,000/-) thereafter
Listing Proposed on BSE/ NSE
Who can apply Category-I Category II Category III
Reservation for Categories 40% of overall issue size 30% of overall issue size 30% of overall issue size
Basis of allocation in case of over-subscription On first-come-first-serve basis On first-come-first-serve basis On prorata / proportionate basis
* For more details, please refer to the Terms and Conditions.

 Jeevan Amrit Review

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