L&T Infrastructure Bonds opens on 7th Feb 2011

by khalid on 08/02/2011 · 10 comments

First tranche of the L&T Infrastructure Bonds came in the market on 15th October 2010 and was available for subscription up to 2nd November 2010. Now again L&T Infrastructure Finance Company Limited has come up with their second tranche of Infra Bonds and the issue is going to open on 7th Feb 2011 and will be available for subscription up to 7th Mar 2011. The issue size of this second tranche is Rs 100 crore. Offering a interest of 8.20% per annum in the first series (series I) which can be redeemed after 5 years and 8.3% in the second series or (series II) can be redeemed after 7 years.

There are 2 investment options are available for these L&T Infra Bonds.
Option 1. Matuarity period for this is 10 years and interest can be have annually or cumulative at the rate of 8.20% p.a. with a buyback option at the end of 5 years and at the end of 7 years.
Option 2. Matuarity period for this is 10 years and interest can be have annually or cumulative at the rate of 8.30% p.a. with a buyback option at the end of 5 years and at the end of 7 years.

Issue Details :-
Issue Period : 7th Feb 2011 to 7th March 2011
Rating : “AAA” by ICRA and CRISIL
Issue Size : Rs 5000 crore
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 5 bonds
Term : 10 years
Lock-in Period : 5 years
Listing : NSE/BSE

The funds raised through these bonds will be utilised towards “infrastructure lending” as defined by the RBI in the regulations issued by it from time to time, after meeting the expenditures of, and related to the issue. These infrastructure bond issues are part of the government’s effort to mobilise money to part-fund the massive $1-trillion infrastructure spend it has planned for the Twelfth Plan.

The maximum amount of income not chargeable to tax in case of individuals (other than women assesses and senior citizens) and HUFs is Rs 1,60,000. In the case of women, the limit is Rs 1,90, 000 and in the case of senior citizens, it is Rs 2,40,000 for FY10. Hence those guys whose income exceeds these slabs can go for these bonds.

Tax Benefits :- Under section 80CCF of the Income Tax Act, Rs 20,000 per annum paid or deposited as subscription to long term infrastructure bonds shall be deducted in computing the taxable income. This is over and above Rs 1,00,000 tax benefit available under section 80C, 80CCC and 80CCD.

Benefits as per Tax slabs :-
1. Slab 10.3% : Rs 2,060
2. Slab 20.6% : Rs 4,180
3. Slab 30.9% : Rs 6,180

Pros:- The limit of Rs 20,000 per annum is in addition to Sections 80C, 80CCC and 80CCD. Hence, it is advisable to consider applying in this issue.
Cons:- The bonds are locked in for five years, so there is no exit in case you need the money midway which restricts liquidity.

After lock in period is over, you can ask issuer (L&T) to buy back bonds Or you can trade these bonds in stock Exchange.

Other Infrastructure bonds:-
Industrial Finance Corporation of India (IFCI),
Infrastructure Development Finance Company (IDFC),
L&T Infrastructure Finance Company Limited (L&T),
India Infrastructure Finance Company Ltd (IIFCL).

These bonds will boost the infrastructure projects in India and at the same time you will get tax benefit and good return.

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{ 9 comments… read them below or add one }

jasbir singh February 14, 2011

I am at LUCKNOW. please let me know WHOM should I contact for buying these bonds.

regards

Reply

khalid February 14, 2011

Hi Jasbir,
You may opt any of the following option for buying these bonds :

1. Through Brokers :-
Kotak Securities Ltd. Enam Securities Private Ltd.
Sharekhan Ltd. JM Financial Services Private Ltd.
IDBI Capital Market Service Ltd. RR Equity Brokers (P) Ltd.
SMC Global Securities Ltd. Bajaj Capital Ltd.
Almondz Global Securities Ltd. HDFC Securities Ltd.
NJ India Invest Private Ltd. Integrated Securities Ltd.

2. Through Bankers :-
Axis Bank Ltd. HDFC Bank Ltd.
IDBI Bank Ltd. Kotak Mahindra Bank Ltd.
ICICI Bank Ltd.

3. Through Online :-
Sharekhan Ltd. ICICI Securities Ltd.
HDFC Securities Ltd. Kotak Securities Ltd.
Reliance Money India Infoline
JM Financial Services Private Ltd.
Or
Here in collection center

Reply

anandkumartewari February 16, 2011

please let me know WHOM should I contact for buying these Infrastructure bonds.

A.K.Tewari
Udham singh nagar
Uttarakhand

Reply

khalid February 16, 2011

Hi Tewari,

You just go to the nearest branch of following banks for applying in L&T Infrastructure Bonds.

Axis Bank Ltd. HDFC Bank Ltd.
IDBI Bank Ltd. Kotak Mahindra Bank Ltd.
ICICI Bank Ltd.

Or

Here in collection center

Hope it will help, thanks for dropping by.

Reply

chandan singh yadav February 21, 2011

I want to purchase infrastructure bonds from where i can purchase and what are the documents needed

Reply

khalid February 21, 2011

Hi Chandan,

You can purchase these bonds online from ICICI Direct and some other similar sites. If you want them in physical format, you will be required to submit the following self attested documents:
PAN card
ID proof
Address Proof

Reply

venkat February 21, 2011

if any body required L&T Infrastructure Bonds processing, please call me at 9241545354 (for bangalore only).

Reply

Dr L N Satapathy March 3, 2011

I want to deposit the L &T bond application. Can you please guide me where to submit the cheque and other documents pertaining to this.

Reply

Amit Surpuriya January 20, 2012

FOR APPLICATION FORMS OF INFRASTRUCTURE BONDS – CONTACT – AMIT SURPURIYA – 9850873688 – PUNE

KSHITIJ FINANCIAL SERVICES
Mutual Fund | Infrastructure Bond | 54EC Capital Gain Bond | Tax Free Bond | Company Fixed Deposit | MediClaim |

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