IRFC Tax Free Bonds – 2013

by Manshu on February 20, 2013

in Economy

IRFC is the fourth company that I’ll be writing about which is issuing a second tranche of their tax free bonds, and their term structure is identical to REC and  PFC.

The issue will also open on February 25th and close on March 15th 2013, and that’s exactly the same as the other two as well, and I’m not sure why all these companies have decided to come out with their issues at the exact same time.

Option Tranche- II Series 1 Tranche- II Series 2
Tenor 10 years 15 years
Minimum Investment Rs. 5,000 Rs. 5,000
Coupon Rate for Retail Investors 7.38% 7.54%
For Others 6.88% 7.04%
Interest Payment Annual Annual

The issue is rated AAA which is the same as the other two and that’s probably the reason why they have the same interest rate as well.

Like the earlier issue this time you can invest in this issue in paper or Demat form and the bonds will be listed on the BSE so you don’t have to hold them to maturity but can trade them as well.

The interest will be paid annually, and there is no option to reinvest the interest in the same bond. I couldn’t find the interest payment date in the prospectus so if anyone knows that then please leave a comment.

This is the fourth post about tax free bonds and since they are so similar I don’t know what else to add. I will however note that they are talking about doing away with tax free bonds from next year onwards so if you are in the 30% tax bracket then these are good to own in your portfolio. Also, it’s good to diversify and own bonds from two or more issuers since their terms are quite identical.

If you have any questions then please leave a comment and I’ll answer them.

Click here to download the application form

{ 5 comments… read them below or add one }

rkg March 14, 2013 at 12:16 AM

IP date is 15th oct every year


Manshu March 20, 2013 at 10:15 AM



pradeep December 7, 2013 at 5:52 PM

yes, got it on 15t oct. it would be better if all tax free bond give interest on same day . i am finding it difficult to track the interest. also the info in bank statement is not enough like rec-int we dont know which bond interest is this etc.


ketki August 12, 2014 at 1:39 PM

Hi Shiv,
I had invested in this bond issue in 2013 march. If i sell them in retail market today, will it be short term capital gain or long term ? what should be the holding period ?


Shiv Kukreja August 12, 2014 at 6:55 PM

Hi Ketki,
It will be LTCG, as for the listed bonds, the holding period of more than one year qualifies for LTCG taxation.


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