Sahil left a comment about IFCI coming out with another series of their Tier II bonds, and I was completely unaware about this. I searched a little more but couldnâ€™t find anything other than the application form on the Bajaj Capital website.
Iâ€™m a bit surprised by that because usually these are easier to locate but this time the documents arenâ€™t even present on the IFCI website.
From the application form I could gather that the issue has already opened on 5th September 2011, and will close on October 10th, 2011.
There are four options in all â€“ two maturities, and a cumulative and annual interest payment option on each maturity option.
Here are the interest rate and other details for the four options.
|Duration||10 years||10 years||10 years||15 years|
|Eligibility||Retail under 5 lakhs||Retail under 5 lakhs||All eligible investors||All eligible investors|
|Call Option||At the end of 7 years||At the end of 7 years||At the end of 7 years||At the end of 10 years|
Like the earlier series, even these Tier II Series 3 NCDs will be unsecured, and will list on the BSE.
The last series that were issued by them also had some very similar features with the 7-year series giving a rate of 10.50%, and the 10-year series giving an interest rate of 10.75%.
I see that the listed NCD 10.5% series closed at Rs. 9,850 yesterday, and this series is quite similar to that one. So if you were interested in these bonds you could just buy the existing bonds from the market and avoid the hassle of waiting for the issue to close, and then get allotment.
And it might even make sense to wait and see what happens when these bonds list on the market and increase the supply â€“ the price may go down even further.
And one last thing about IFCI itself â€“ Iâ€™ve seen several people refer to it as a government company right from the time they issued the infrastructure bonds last year, but this is not true. The central or state government doesnâ€™t own any stake in IFCI.
This is what the shareholding pattern looks like
|Mutual Funds / UTI||1.07%|
|Financial Institutions / Banks||13.89%|
|Individuals holding more than Rs. 1 lakh||7.12%|
If I get the prospectus â€“ Iâ€™ll go through it and see if thereâ€™s any more pertinent information there, and update the post then.