L&T Infrastructure Finance Co. Ltd., a wholly owned subsidiary of L&T Finance Holdings Ltd. opened its issue of long term infrastructure bonds for subscription on 15th October, 2010. An investment of upto Rs.20,000 by Individuals and HUFs in these bonds is eligible for an additional tax benefit u/s 80CCF of the Income Tax Act, 1961. This is in addition to the tax benefit of Rs.100,000 available u/s 80C, 80CCC & 80CCD (read in conjunction with Section 80CCE).
These bonds are being issued in the nature of Secured, Redeemable, Non Convertible Debentures (NCDs) and have been rated CARE AA+ by CARE, and LAA+ by ICRA. The bonds can be held in both physical & dematerialized form and can be pledged, hypothecated and a lien can also be created on it for the purpose of availing loan from scheduled commercial banks after the lock-in period.
Each bond has a face value of Rs.1,000 and can be applied for in multiples of 1 Bond/ Rs.1,000 after the minimum application amount of Rs.5,000 (5 Bonds). The bonds are proposed to be listed on National Stock Exchange of India (NSE) and can be traded after the lock-in period of 5 years.
Buyback option will be provided to bondholders on the 1st working day after 5 and 7 years from the date of allotment, and both annual interest payout & cumulative interest (annually compounding) options are available under the issue.
The coupon on the bond with the 5-year buyback option is 7.50% p.a. whereas the coupon on the bond with the 7-year buyback option is 7.75%. If the bonds are held till maturity, the principal amount with interest (in case of cumulative option) will be paid to the bondholder after 10 years.
The issue closes on 2nd November, 2010.
Please click here to view the product note of the issue. If you would like invest in these bonds, please write to us with your contact details on info@adventfa.com
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