ISSUE: Indian Railway Finance Corporation Limited Bonds (IRFC TAX FREE Bonds).
Issue Opening Date: Friday, January 27, 2012
Issue Closing Date: Friday, February 10, 2012
Interest Rate: 8.10% annually.
Allotment Basis: First-come-First-serve basis.
DOWNLOAD: Indian Railway Finance Corporation (IRFC) Bond Application Form (CLICK HERE)
SALIENT FEATURES:
- The Company shall issue Bonds upto an aggregate amount of Rs 6,300 crores in one or more tranche(s), on or prior to March 31, 2012 pursuant to CBDT’s Notification dated September 23, 2011 which authorised the Company to raise tax free bonds aggregating up to Rs 10,000 crores in the financial year 2011-12.
- Credit Ratings of “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE and “ICRA AAA by ICRA indicating Highest Degree of Safety in terms of timely servicing of financial obligations.
- Bonds to be allotted on first-cum-first serve basis up to the limit reserved for each category of investors
- Bonds can be held in physical or in dematerialized form, at the option of bondholders
- Bonds are proposed to be listed on the BSE and the NSE
ISSUE STRUCTURE:
Instrument: Tax Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures
Instrument Form: In dematerialized form as well as physical form, at the option of Applicants.
Trading: Compulsorily in dematerialized form
Issue Size: Rs. 6,300 Crores in one or more tranches in the financial year 2011 – 2012
Credit Rating: “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE & “ICRA AAA” by ICRA
Tenor/Redemption Date: 10 Years and 15 Years from the deemed date of allotment
Trustee for the Bondholders: Indian Bank
Depositories: NSDL and CDSL
Proposed to be listed on: BSE & NSE
Interest on Application Money: @ 8.00% p.a. on the amount for which Bonds are allotted to the Applicants subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of banking of the application (being the date of submission of each application as duly acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment.
Interest on Application Money which is liable to be refunded: @ 4.00% p.a. on application money that is liable to be refunded to the Applicants in accordance with the provisions of the SEBI Debt Regulations, or other applicable statutory and/or regulatory requirements, subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of receipt of the application (being the date of presentation of each application as acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment.
Provided that IRFC shall not be liable to pay any interest on monies liable to be refunded in case of (a) invalid applications or applications liable to be rejected, and/or (b) applications which are withdrawn by the applicant.
HIGHLIGHTS OF TAX BENEFITS
- Interest on these Bonds shall be exempt from income tax and shall not be included while computing the total income as per provisions under section 10 (15) (iv) (h) of Income Tax Act, 1961, as amended.
- Since the interest income on these Bonds is exempt from tax, there shall be no deduction of tax at source.
- Wealth Tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.
