80CCF Infrastructure Bonds Calendar 2011

IFCI has come out with the first infrastructure bond issue of this year, and I was a bit surprised to see how early they came out with the issue this time.

They had to come out with several tranches last year because they were never able to reach their targets, and I think the same thing is going to happen this year as well.

They will come out with several tranches and so will the other players who are allowed to issue infrastructure bonds.

I had written a fairly comprehensive post on Section 80CCF infrastructure bonds FAQ last year, and you can read that post and the comments to familiarize yourself with these bonds if you aren’t already aware of them or need a refresher.

I think it’s too early to buy these infra bonds right now, and it’s better to wait for a few more issuers to come out with their issues. Don’t expect a much higher interest rate from the other issuers though because the interest that they can offer is capped, and the interest rate difference isn’t going to be much.

The other thing that I want to emphasize is that the real benefit of these bonds is that they allow you tax benefits to the tune of Rs. 20,000 over and above what you save by investing in Section 80C instruments, so if you don’t think you will be able to max out Rs. 1 lakh investment in 80C, then don’t bother with these bonds.

I’m going to review each of these issues in detail, and use this page as a calendar and summary page for every infrastructure bond issued.

If you want to see some more details on the issue then let me know and I will modify the table.

S.No. Issuer Series Tenure Open & Close Date Interest Rate
1 IDFC Tranche 2 Series 1 10 years with a buyback option at 5 years Jan 11 2012 – Feb 25 2012

8.70%

2 IDFC Tranche 2 Series 2 10 years with a buyback option at 5 years Jan 11 2012 – Feb 25 2012

8.70% compounded annually

3 Srei Infrastructure Finance Series 1 10 years with a buyback option at 5 years Dec 31st 2011 – Jan 31st 2012

8.90%

4 Srei Infrastructure Finance Series 2 10 years with a buyback option at 5 years Dec 31st 2011 – Jan 31st 2012

8.90% but compounded and will be paid at maturity

5 Srei Infrastructure Finance Series 3 15 years with a buyback option at 5 years Dec 31st 2011 – Jan 31st 2012

9.15%

6 Srei Infrastructure Finance Series 4 15 years with a buyback option at 5 years Dec 31st 2011 – Jan 31st 2012

9.15% but compounded and will be paid at maturity

7 REC Series 1 10 years with a buyback option after 5 years Dec 19 2011 – Feb 10 2012

8.95% but compounded and will be paid at maturity

8 REC Series 2 10 years with a buyback option after 5 years Dec 19 2011 – Feb 10 2012

8.95% annual

9 REC Series 3 15 years with a buyback option after 7 years Dec 19 2011 – Feb 10 2012

9.15% but compounded and will be paid at maturity

10 REC Series 4 15 years with a buyback option after 7 years Dec 19 2011 – Feb 10 2012

9.15% annual

11 L&T Infra Series 1 10 years with a buyback option after 5 years Nov 25 2011- Dec 24 2011

9.00% payable annual

12 L&T Infra Series 2 10 years with a buyback option after 5 years Nov 25 2011- Dec 24 2011

9.00% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

13 IFCI Infra Series IV Series I 10 year with 5 year buyback Nov 30 2011- Jan 16 2012

9.09% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

14 IFCI Infra Series IV Series II 10 years with a buyback option after 5 years Nov 30 2011- Jan 16 2012

9.09% payable annual

15 IFCI Infra Series IV Series III 15 years with a buyback option after 5 years Nov 30 2011- Jan 16 2012

9.16% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

16 IFCI Infra Series IV Series IV 15 years with a buyback option after 5 years Nov 30 2011- Jan 16 2012

9.16% payable annual

17 IFCI Series III – Option 1 10 years Sept 21 2011 – Nov 14 2011

8.5% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

18 IFCI Series III – Option II 10 years Sept 21 2011 – Nov 14 2011

8.5% payable annual

19 IFCI Series III – Option III 15 years Sept 21 2011 – Nov 14 2011

8.75% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

20 IFCI Series III – Option IV 15 years Sept 21 2011 – Nov 14 2011

8.75% annual

21 PFC Series 1 10 years with a buyback option after 5 years Sep 29 2011 – Nov 4 2011

8.5% interest payable annual

21 PFC Series 2 10 years with a buyback option after 5 years Sep 29 2011 – Nov 4 2011

8.5% interest cumulative payable at the end of the term

22 PFC Series 3 15 years with a buyback option after 7 years Sep 29 2011 – Nov 4 2011 8.75% payable annual
23 PFC Series 4 15 years with a buyback option after 7 years Sep 29 2011 – Nov 4 2011 8.75% cumulative payable at the end of the term
24 IDFC Series 1 10 years with a buyback option after 5 years Nov 21st2011- Dec 16 2011 9.00% payable annual
25 IDFC Series 2 10 years with a buyback option after 5 years Nov 21st2011- Dec 16 2011 9.00% effective, but interest will not be paid annually and a lump-sum will be paid at maturity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I haven’t found their prospectus yet and this info is sourced from Moneyvriksh – when I get hold of the prospectus – I will do a more detailed post.

Update 1: Fixed Option 2 interest payment detail per Shiv’s comment

Update 2: Including Option 2 per comment from Shiv (who you can contact to invest in Infrastructure Bonds & Save Tax u/s. 80CCF at skukreja@investitude.co.in)

164 thoughts on “80CCF Infrastructure Bonds Calendar 2011”

  1. sir , i was bought l&t infra bond rs 20000/ at dec/11. through karvy stock broking . still today i du not received any original bond cirty ficate. so pl. confirm what is the status of my bond. i am leaving at. village. my cell no is 7046599890 mr chandubhai r patel. call soon or reply pl. my email
    my acknoledge deatils as below
    apli.no 24815946 rs, 20000/ cumulative option.cheque from dena bank.
    thanks
    c r patel.

  2. Hi Manshu.. IDFC has approved the prospectus for Tranche 3 of Infrastructure Bonds which will open on March 19th & close on March 30th.

  3. hi manshu,
    i want to clear my doubts regarding IT deduction under section 80 CCF and 80 D.
    After so much inquiry I found the line -‘Rs.20000 is deductible from taxable income’ in case of 80 ccf and ‘Rs.15000 (individual) and Rs.20000 (parents) is deductible from taxable income’ in case of 80 D.

    for example :-
    Ist example
    if my annual income is Rs.400000
    (-) deduction upto Rs.290000 (190000+100000)
    (-) investment under 80ccf Rs. 20000 (deduction under infra bond)

    Total taxable income Rs.90000
    income tax will be Rs.9000 (10%)

    2nd example

    if my annual income is Rs.400000
    (-) deduction upto Rs.290000 (190000+100000)
    (-) investment under 80ccf Rs. 2060 (10.3% of 20000) (deduction under infra
    bond)
    Total taxable income Rs.107940
    income tax will be Rs.10794 (10%)

    my question is which example is correct and right and also in case of 80d which example will be applicable.

    kindly reply me soon

    thanks

    1. Hi Ankur.. I’m yet to get any convincing answer to your query. I consulted 3-4 CAs in my circle and they were also unaware of its treatment. In case I get a concrete reply with some documented evidence, I’ll surely let you know.

    1. Hi Mr. Karthik.. IDFC Tranche 2 issue is supposed to close on February 25th, 2012, from the beginning itself. Hence, it is not an extension.

  4. Hi Manshu… IFCI has extended the closure date of its Infra Bonds issue to February 8th, 2012. It is a good news for people who wanted to invest in IFCI bonds at 9.09% or 9.16% with 5 years lock-in period. I wonder why IDFC and L&T did not extend their closure dates in December when it was known to them that they wont be able to offer 9% rate of interest in the coming months due to falling G-Sec yields. They could have collected much more money from the investors.

  5. REC,IDFC, L&T infrasructure bonds are available in the market and REC offers sightly high interest than the rest two,could you plz tell me which one is more safe invest?

    thanks
    jolly

    1. Hi Jolly… all these issues are quite safe to invest. IDFC issue is ‘AAA’ rated and ‘Secured’, L&T issue is ‘AA+’ rated and ‘Secured’ and REC issue, though not rated and ‘Unsecured’, is also quite safe as it comes from “A Navratna Public Sector Enterprise”. It is very difficult to conclude which one is MORE SAFE to invest among these three.

    1. Hi… ya it is coming from January 11th, with a lower rate of interest of 8.70% as compared to 9% which was there in the 1st tranche. L&T Infra Bonds – Tranche 2 is also opening on January 10th with same 8.70% interest rate. Other terms are absolutely same as they were in Tranche 1.

  6. I have heard about IDBI infrastructure bonds and that last year they had come during Jan. Any information regarding them? I dont see them in the infrastructure bond calendar either. My husband has missed to apply for other bonds that were open earlier, hence thinking of either IFCI or if IDBI would open in near future. Please suggest.

    Thanks,
    Sunita

  7. Hi Shiv,
    Given that SREI bonds are secured while REC/IFCI are unsecured, would REC still be the best option?

    Hi Manshu,
    Would the secured/unsecured factor be significant enough to include in the comparison table that you have made?

    Regards,

    Haresh.

    1. At present REC bonds are the best option, although they are unsecured, as it is a private placement, where as the SREI bonds is a public issue, which can only be made against security of underlying assets & hence it is secured.

      Secured/Unsecured bonds hence does not really make a difference in such a case & cannot be compared. All unsecured bonds are being issued by government undertakings.

      1. Hi Manish.. it is not always be the case. PFC issued Infra Bonds which was a Public Issue and the bonds were Secured.

    2. Hi Haresh.. SREI Infra Bonds are Secured as the equivalent assets must have been leveraged to make it secured but I would still say REC offering is better as it is a Govt. controlled corporation and also the rate of interest is higher. Secured & Unsecured thing does make a difference but not that much. If a similar company like PFC comes out with a Secured Infra Bonds @ 8.90%, I would take that.

  8. Hi Manshu / Shiv,

    Indian infrastructure financing company SREI Infrastructure Finance Ltd’s long-term infrastructure bonds issue, through which it plans to raise Rs 3 billion in the first tranche, hit the market on Saturday, 31/12/2011.

    The bonds have a face value of Rs 1,000 and comes with two maturity periods of 10 and 15 years and a lock-in period of five years. The bonds will be issued in four series with an annual interest rate of 8.90% for series 1 and 2, and 9.15% for series 3 and 4.The issue will remain open for subscription till January 31.

    Regards,

    Manish.

    1. Hi Manish… ya I checked it last week only. Again, I would prefer 8.95% REC Bonds over 8.9% SREI Infra Bonds.

    2. Thanks for that info Manish – I think I should do a post on this as well since I’ve written about all the other infra bonds prior to this. Will update the calendar as well – thanks!

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