This calendar is for last year’s bonds, and you need to go here to look at the 2011 80CCF Infrastructure Bond Calendar.
A lot of you are interested in the next infrastructure bond issue, which helps save tax under section 80CCF, and since I didn’t find any consolidated information anywhere I thought I’d create this post with a list of the infrastructure bond issues that are expected to come out in the market in the next few months.
This was also triggered by the fact that ICICI Direct has started offering the IFCI Infrastructure Bonds series – II already, and it looks like these bonds will be available till December 31st 2010.
I couldn’t find their prospectus, and the page on their website that should hold details about the issue is actually blank! So I don’t have a lot more details right now, but will write a post once I get more details.
Here are the bond issues that I’m aware of.
| S.No. | Name of the issuer | Expected Time Frame |
| 1 | REC | January 12th 2011 – March 31st 2011 |
| 2 | IDFC | Issue re-opens on January 17th 2011 |
| 3 | IIFCL | Feb 4 2011 – Mar 4 2011 |
| 4 | L&T Infrastructure Bonds |
Second tranche in February- |
| 5 | Power Finance Corporation (PFC) | |
| 6 | IFCI | November 16 2010 – January 12th 2011 |
| 7 | LIC | There are reports that this issue may not happen this year. |
If you know of any other please leave a comment and I’ll update the post.
{ 89 comments… read them below or add one }
Thanks !!
It would be a good idea also to mention the interest rates.
I have read somewhere that the offer from LIC is going to be most lucrative as LIC is also planning to offer free cover with these bonds.
http://www.allbusiness.com/insurance/insurance-policies-claims-insurance/14927540-1.html
Thanks Amit, I thought of putting the interest rate there, but then left it because it’s all going to be blank right now, as the interest rates are not out yet. Maybe I’ll just add them and keep filling out later, as with the dates.
That’s quite an interesting thing you have shared there! So LIC might offer free term insurance, that should draw a few people for sure. Thanks!
Is it necessary to have a demat account to buy tax savings Infrastructure bonds. As recent bond of IFCI series II is asking for demat account. What will be the solution if somebody do not have demat account.
For this particular issue, there is no alternative. IDFC also started out asking for a demat account, but then they changed it to allow physical applications. You could wait for other issues, and they might allow physical forms, but there is no guarantee that they will actually do so Suvu.
@ Suvu – Manshu have already answered your question. You should opt for a Demant Account as in near future also, you will only be allowed to invest into bonds or debentures via Demat account only. Also, IDFC second tranche is expected either end of this month or in the first week to Jan and third and last tranche will follow in March.
Keep checking this space for any further updates.
Imran
99200-67880
it is true that it is inappropriate to forecast the interest rate of any issue. But the minimum rate at which one should subscribe, keeping in mind the inflation, the current and expected bank deposit rates during feb/march 2011 and each of IT tax brackets viz 10%, 20% or 30%. Also any other factors which might influence an individual to decide to invest here or choose a bank FD instead.
L & T Infrastructure bond is not mentioned in list
Oh that’s because it was already over when I made the list, and this is only for future issues. Thanks for bringing it up though.
Whether Long Term Infrastructure bonds issue of L & T is extended till 15th Jan, 2010?
I haven’t heard or read anything about it, and I don’t see the option in ICICI Direct or their official website….where did you come across this Sreenivas?
We in our organisation have to show the investments in Infrastructure Bonds by January 15, 2011. Any issue other than IFCI is likely to come in very near future?
Hi Manshu…is it possible for us to buy the Infrastructure bond without the Demat acc…and if no is it possible for us to buy the bonds on our name thru spouse’s Demat acc..please suggest
Can I get the LIC infrastructure bond before 31st of December?
No, that has not been released to the best of my knowledge Subramanyam.
I want to invest in two different infra bonds for 20k each. Suggest me the best ones. I want to buy it this week as the proof submission date is already declared by HR.
I’m not aware of any issue that’s open currently. Another thing is that the limit on the tax break is Rs. 20,000 so buying more than that will not get you any tax benefit, and you can get the same rate of interest with shorter maturities at other places.
Hey Vikram – A reader just left a comment, and informed that IFCI has extended their date to 12th January 2011, so if you’re interested in that one you still have time.
IFCI bond last date seems to be extended till 12th jan 11. Check below link
http://www.ifciltd.com/IFCIBonds/InfrastructureBonds/CurrentIssue/tabid/218/Default.aspx
The form gives 4 options, cumulative / non cumulative/ buyback / w/0 buyback.
Can anyone advise / guide me to choose the right option?
Thanks Arun – this is very useful info as a lot of people were looking for it, and I wasn’t aware that this was extended.
Which series you buy depends on your preference really. If you’d like to get paid interest annually, and have a buyback option so that you can get your principal back earlier then go for the non cumulative buyback option, which has a slightly lower interest rate. If those are not your priorities, then you can think about getting a slightly higher rate in the other options.
Hi Manshu – it’s mentioned in discussion above that LIC might offer better interest rates than IFCI’s (8 & 8.25%). should i wait for it? will it come in this FY? i have the deadline of 20th Jan to submit my investments proofs at my company?
Hi Bhawna – LIC might offer a free term insurance with their bonds, as that was something reported in the papers some time ago, but I haven’t heard or read anything about that later on.
I’m not sure if and when they will bring their offer, so if you want to take a chance it’s up to you. Please bear in mind though that there is a time lag between applying for the bonds, and getting the proof etc. esp. if you’re using the demat option.
Thanks Manshu – so do you mean if i apply through the physical form, i can get the proofs earlier?
Some people have said that the receipt given when you apply in physical form was used as a proof by them. I don’t know if they had to provide the allotment advice later on, or if that was sufficient.
If possible, you can check with your office folks what they recommend.
yes will do – thanks 🙂
You’re most welcome 🙂 All the best.
How one can apply for these Bond using ICICI Direct? I am not able to see any option after logging into the ICICI Direct account?
Login –> FD / Savings – Scroll down, and you will see the IFCI Infrastructure bond option Rajesh.
Hi, what kind of a return can we expect from the infra bonds after a period of 5 years, is it A good investment option not keeping in mind the tax benefit? Has the date for IFCI bonds by Icicidirect been extended till 12th Jan?
Thanks,
Pallavi
Pallavi,
IFCI was offering 8% and 8.25% in its various options, so that’s about the range you can expect. In my opinion it is not a good option because you can get similar rates in a bank for a much shorter duration. Like Bank of Baroda has this Utsav scheme going which pays 8.35% for 444 days.
Yes, the IFCI bonds have their last date extended to 12th Jan.
Hi, I am unable to locate the link in Reliance money for IFCI infrastructure bond. Can I invest on line though Rmoney?
I don’t know that Ajay, it might be available as an option, but I’m not familiar with it.
Hi Manshu,
What bonds are available from tomorrow to next month mid… I have account in nirmal bang (broking agent). Can I purchase through that one.
Thanks in advance.
IDFC will be available from a little later this month, but outside of that nothing has been announced yet. When I read or hear about a new issue I will update this post. I’m not sure about Nirmal Bang, but a quick phone call to them will let you know.
Can one apply for these Infra Bonds online in more than one installments? For example, I plan to invest in IDFC Infra Bonds say Rs. 20000 but I only invest
Rs. 10000 now & later (before closing date) again invest Rs. 10000. Is it allowed to invest more than once in the bonds of same company? Will I gat benefit of 80CCF
for total Rs. 20000 or only for first Rs. 10000?
Yes, you’re allowed to invest more than once Rakesh. But it might be easier for you to just invest once later on as you will have one application number to track, and will reduce your headaches. That’s just my opinion though, and you can do what suits your situation.
plz inform me that which is the co. has opened infrastreture bond…….
Piyali, REC & IDFC are currently open.
I feel that main reason to apply for Infra Bonds is not earning higher interest rate but
to get benefit under 80CCF which makes the effective interest rate very high. If benefit under 80CCF is not the main reason for applying for these bonds then I guess
investments in Bank FDs, MFs or Shares may yield better returns.
Yes Rakesh – that’s right in my opinion. However, it’s not correct to compare equity mutual funds or shares with these bonds because they carry a much higher risk when compared to these bonds.
Today one of my friends told me that IDFC is a private sector company. I was under
impression that it is a Public Sector/Govt. Company. Kindly suggest. Kindly also suggest how safe it is to invest in this company?
That’s right that it is private sector. The bonds have got the highest credit rating from ICRA, and since these are secured bonds there is a high degree of safety.
But if you’re not comfortable then you can always go for REC which is a Navratna.
I wish to apply for infrastructure bonds . Which company bonds are best, flexible and safe secured. Is L&T infrastructre bonds are coming soon? Any Govt or public sector bonds are in pipe line? pl inform
Regards
akgupta
REC which is a Navratna is currently open, so you can look at that. Terms of most of these issues are similar, so if you feel comfortable in a government enterprise then REC bonds are something to look at.
History of past infrastructure bond issues :
Issue Closed on ROI 5 Yr ROI 10 Yr Rating
IFCI-1 31/08/2010 7.85 7.95 BWR AA
IFCI-2 31/12/2010 8 8.25 BWR AA
IDFC-1 18/10/2010 7.5 8 ICRA LAAA
L&T 15/11/2010 7.5 7.75 (7 Yr) ICRA LAA+
Present issues :
IDFC-2 04/02/2011 8 8 ICRA LAAA
REC 28/03/2011 8 8.10 ICRA LAAA
Annual yield for a person in 30% tax bracket is 16.5% (when opted for 5 year buy-back option). And, this is the maximum yield one can get across 5/7/10 years tenure, and 10/20/30% tax brackets.
As per Valueresearch.com, average yield over last 5 years was around 14% for Tax planning funds category, with the best fund in the category giving 22%.
Nifty/Sensex yield has been around 16.5% over last 5 years.
Therefore, one can take exposure in infrastructure bonds, but should limit oneself to Rs. 20,000 only. If you are not able to invest in infrastructure bonds now, you should not worry. Instead, start investing in good funds for 5-7 years term.
Parag,
Thanks for providing these details, but let me point out that comparing bonds to equity is like comparing apples to oranges because one is debt and the other is equity. Comparing returns is one thing, but then you need to keep in mind risk as well. It’s common for equity to lose in value a lot in a little time, whereas debt instruments provide a lot more safety, so these are two different things altogether.
Completely agree with you, Manshu.
Keeping in mind the rate of inflation, and the risks in equity, it will be advisable for persons in 30% tax bracket to invest in these bonds. But, for lower tax brackets, these may not be so lucrative.
BTW, with the recent hike in repo & reverse-repo rates, I would be happy to see a bonds issue with ROI of 8.25%. Any idea when PFC & IIFCL issues will come ?
I’ve been hearing March Parag – so let’s see. Anyway the excess of 25 basis points on 20 grand is just 50 bucks an year, so not that much in absolute terms.
Manshu,
While IDFC issue is a “public issue” of “secured debentures”, REC’s issue is “private placement” of “unsecured bonds”. Does it make any difference ?
Thanks. In fact I was deceived by the name of the company. I was always under impression that companies having names ending with “corporation” are Govt./Public Sector Companies e.g. LIC. Anyway, no harm done if my Rs. 20000/- are safe & will be refunded after 5 years. Anyway, it may help if you can mention
the type of company (Govt./Public Sector/Private) for each company in your
tables. Thanks again. RAKESH
I suppose the IIFCL issue opens on 4th Feb 2011 and closes on 4th March 2011
Thanks Girish – I’ll update the post with this info.
Hi manshu,
It’s not releated to infrastructurebonds… It’s related to a company which got liquedated…
My father invested in shares long back “It is Alsa housing and construction limited”. May be around 1993… When i saw it in quotes… I am gettting information as company was liquedated… Is there any possibility to get the money…
This is not only for the company specific. But, what to do if such case happens.
Thanks,
chandrasekhar G/.
As far as I know nothing can be done about this. There are some brokers who buy shares which are in physical format at a discount, but the company is still in existence.
If this company is not in existence then the shares are likely worthless. So, I don’t know of a way to get you any money out of it.
Thanks for the reply…
Finally, I know that in IDFC, C stands for Company & not for Corporation. It clarifies my doubt about IDFC being a private company & not a Govt. company.
🙂
L&T Infra Bonds (L&T INFRA 2011A SERIES : LTINFR) opened today & are available until 7 March 2011.
http://www.idfc.com/infra-bonds/scheme_features.htm
Another 80CCF issue.
Thanks for that info Nayan.
I want to invest Rs 20000 in Power Finance corp Infra bonds closing on 22/3/2011.Can I get a firm allotment? If not how the allotment is done?
Hello Manshu,
Thanks for starting this post.
Can you please tell me about the bonds still open along with the interest rates that will benefit me in tax saving for the next assessment year(2011 – 2012). Are the tax saving FDs better?
Vandana – PFC is open for another day and I think the next issue of IDFC will be open till the end of this year.
So, based on your question it looks like your 1 lakh limit under 80C hasn’t been exhausted yet. If that’s the case then you can get a tax saving FD done as that can be done with lesser hassles, as a lot of people have had to struggle with getting tax receipts and such.
i want to buy urgent infra bonds now. pls help!
my email id is naveenkumar.singhal@yahoo.com
or call me at 9768644052.
regards
Naveen
For financial year 2011-12 Iwould like to invest in long term infrastructure bonds, can I know the next issues, of LIC,REC,IDFC OR L& T INFRA. Pl. help
Regards,
T.Ravindra
They haven’t been declared yet, and I don’t think they’ll come out so soon with them. But when they are declared you are likely to read about them in the papers, and I will cover them as well.
Hey,
Any idea when Infra bonds for fiscal 2011-2012 will start comming? Also, which are ecpected companies to offer their bonds?
Any info will be highly appriciated.
Thanks,
Glad.
Glad – That info is not out yet, I’d be surprised if they do launch now since we’re so far away from the tax season, and these bonds only pick momentum near the tax season.
I understand. But please keep posted in case any news you come across. Would share in case I come to know anything about this.
thanks again,
Glad
Sure, will do Glad. Thanks!
At present today’s date (18th July,2011) which company’s bonds are available for tax saving?
There is no infra bond available for sale right now. I think you will see new issues around November or so.
Hi and Infra bonds are expected in November ,any Idea?
I don’t know of any new issues but you might want to take a look at the existing issues that are open. Here is the more recent post on that. Click on this link to see the various options open right now.
http://www.onemint.com/2011/09/22/80ccf-infrastructure-bonds-calendar-2011/
I am gonna subscribe IDFC. There are a few reason for that.
1. I don’t wanna miss this opportunity for saving due to delay in arrival of certificates, so have to buy before 31 Dec 2011.
2. Interest rate is higher and probably will remain same for coming offers from other players.
3. Rating are good as compared to previous offers.
4. Would definitely love to opt for LIC but am unsure if such an issue will be in market this year.
I have one apprehension. Should I go for cumulative or annual..? Are interest paid annually tax free..?
Interest paid annually is not tax free. It is taxable, and so is the cumulative sum – that’s also taxed acc to interest rules. It depends on what you prefer but with the high inflation and opportunity to reinvest the interest at a higher amount, I’d personally prefer the annual interest option.
HI, GIVE A ALL LETEST BOND INTREST RATE OF F.Y
I want to buy infrastructure bond to save my tax (2011-12 financial year). I am looking for an agent who will help me to buy this bond. Please call me on +91 9810244072
these have been extended:
Company Closure Date Lock In Period 10 Years 15 years
IDFC 05.03.2012 5 years 8.70% NA
L&T 12.03.2012 5 years 8.70% NA
SREI 06.03.2012 5 years 8.90% 9.15%
PFS 16.03.2012 5 years 8.93% 9.15%
Hi Manshu,
Thanks for providing info on upcoming bond market calendar. New to this whole asset class, and wish to know few things… I have searched for SBI bonds 9+% NCDs and found them trading at premium 10k bond trading at 11.5k etc.. Every march, the bank credit interest as per int %.
My question to you is, If I buy these bond (SBINN3 NSEcode) from secondary market now by paying say…11.5k each, who will get interest for the current year, will I or the seller as he held it for almost one year.
Hi Sunieta.. the holder of these bonds on the record date, say it is March 18th, 2012, will get the interest paid on April 2nd, 2012. You are paying a higher price for these bonds as compared to their face value of Rs. 10,000, so you deserve to get the interest as well. The seller of these bonds, who will not get any interest after selling the bonds before the record date, will get a higher price to get compensated.
Thanks Shivji for the reply.
I have a follow up query, If I buy in demat form as is the case here, how SBI knows my bank account number to credit interest?
I understand if I buy in NFO stage, I fill all details in subscription form and hence bank has my records.
But for purchasings in secondary market, how is my details are updated? Do they update instantly or is there a possibility they take longer time enough to credit the interest in sellers bankacct instead of the buyers’ ? Sorry if I sound too immature but… not sure how these psu banks take care of such
:-).. No need to feel sorry about it, it is perfectly fine.. If you’ve any Demat A/c. with you, you must have held some shares in it. Like dividend on shares is credited to the default Bank A/c. which is linked to one’s Demat & Trading A/c., interest income earned on SBI bonds (or for that matter any kind of bonds/securities) gets credited to the same Bank A/c.
If you’ve your HDFC Bank A/c. linked to your Demat A/c. & you apply in an NFO filling the details of your ICICI Bank A/c., you’ll still get all the dividends/interests in your HDFC Bank A/c.
I guess the interest earned on Infra Bonds is taxable? Should the companies issue the Interest certificate for tax purposes? If not, how do we pay tax on the interest credited to the SB A/C?
Best regards, RAKESH
Hi Mr. Jain.. You just need to pay the tax on the interest received as per your tax slab. As there will be no TDS on the interest earned, there will not be any Form 16A issued to you. But these cos. do intimate the investors when the interest is paid through their own means of communications.
I received interest on Infra Bonds purchased last year from IDFC. Do I have to pay tax on this interest? Company has sent no Interest certificate. How do I pay tax without this certificate as I have no proof for interest amount except account statement showing interest entry. Kindly suggest.
Sorry for my earlier post as Mr. Shiv Kukreja has already answered my query. Thanks to Mr. Kukreja. The only question remains is why company has not sent the Interest certificate? I sent an E-mail to them in this regard but received no reply.
Hi Mr. Rakesh.. I think it depends from co. to co. whether they send it or not. I dont know what is the use of these interest certificates. After all one needs to pay tax on the interest income and also there is no TDS. If the interest income is more than Rs. 2500 and the co. deducts required tax at souce, then the co. is bound to issue Form 16A to the investor.
Thanks. I contacted IDFC & suggested me to contact Karvy Consultants. Karvy sent me a
Interest Advice by E-mail & informed that it has been posted on 28-2-2012 to my address. I guess, I will receive this within next few days. Best regards, RAKESH
I guess, even if company deducts TDS, it will deduct @ 10% & issue a TDS certificate. If one is
in higher slab of income, he/she will need to pay tax at higer than 10% & TDS certificate will
prove that 10% is already paid.
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