NHAI, PFC file prospectuses, coupon rate not yet decided
The National Highway Authority of India (NHAI) and Power Finance Corporation (PFC) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi).
Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1.
Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income.
Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free.
"NHAI's public issue of tax-free nonconvertible bonds of face value of Rs 1,000 each is in the nature of debentures having tax benefits under section 10(15) (iv) (h) of the Income-Tax Act, 1961," the prospectus said.
The coupon rate for these bonds is yet to be fixed. The bonds will have two maturity tenures of 10 years and 15 years.
The coupon rate for these tax free bonds will be nearly 8.5 per cent, a merchant banker handling the issue said.
The NHAI issue has already got AAA rating from three agencies Crisil, CARE and Fitch. The PFC bonds are also rated AAA by Crisil and Icra.
Bond tale NHAI clarified the interest from its new bonds will be tax-free Tax-free bonds give investors tax-free return on any amount invested The bonds will have two maturity tenures of 10 years and 15 years
MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up.
Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1.
Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income.
Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free.
"NHAI's public issue of tax-free nonconvertible bonds of face value of Rs 1,000 each is in the nature of debentures having tax benefits under section 10(15) (iv) (h) of the Income-Tax Act, 1961," the prospectus said.
The coupon rate for these bonds is yet to be fixed. The bonds will have two maturity tenures of 10 years and 15 years.
The coupon rate for these tax free bonds will be nearly 8.5 per cent, a merchant banker handling the issue said.
The NHAI issue has already got AAA rating from three agencies Crisil, CARE and Fitch. The PFC bonds are also rated AAA by Crisil and Icra.
NHAI's issue was earlier slated to hit the market early in December but may take a few more weeks, according to merchant bankers. PFC filed the prospectus last week.
Bond tale NHAI clarified the interest from its new bonds will be tax-free Tax-free bonds give investors tax-free return on any amount invested The bonds will have two maturity tenures of 10 years and 15 years
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