PFC Infrastructure Bonds opens on 24th Feb 2011

by khalid on 27/02/2011 · 11 comments

Power Finance Corporation (PFC) plans to raise Rs 5,300 crores through the Tax Saving Long Term Infra Bonds under Section 80 CCF from 24th Feb 2011 to 24th Mar 2011. These PFC bonds would be the last issuer to issue infrastructure bonds in this financial year. The bonds carry a interest rate of 8.30 per cent for 10 years and 8.50 per cent for the 15-year series. There is a lock-in period of 5 years for 10 years bonds and 7 years for 15 years bonds.

As per section 80CCF of income tax, an individuals can invest up to Rs 20,000 in these bonds in addition to the Rs 1 lakh limit available under Sections 80C, 80CCC and 80CCD such as life insurance premium, provident fund, PPF and National Savings Certificate.

There are 2 investment options are available for these PFC Infra Bonds.
Option 1. Matuarity period for this is 10 years and interest can be have annually or cumulative at the rate of 8.30% p.a.
Option 2. Matuarity period for this is 15 years and interest can be have annually or cumulative at the rate of 8.50% p.a.

Issue Details :-
Issue Period : 24th February 2011 to 22nd March 2011
Rating : AAA / Stable by CRISIL and LAAA / Stable by ICRA
Issue Size : Rs 5,300 crore
Face Value : Rs 5,000 per Bond
Subscription Amount : Minimum 5 bonds
Lock-in Period : 5 years or 7 years
Listing : NSE/BSE

The Issue proceeds 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.

IIFCL, IDFC and L&T Infrastructure Bonds are the some of the other infrastructure finance companies that have launched public issue of infrastructure bonds in recent days. While IIFCL is raising Rs 1,200 crore, L&T Infrastructure Finance is raising Rs 400 crore, which includes green-shoe option.

The Book running lead managers to the issue are ICICI Securities and SBI Capital Markets.

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.

Currenly available infrastructure bonds :-
1. PFC Infrastructure Bonds ( 24th Feb 2011 to 24th Mar 2011 )
2. IIFCL Infrastructure Bonds Tranche 1 ( 4th Feb 2011 to 4th Mar 2011 )
3. L&T Infrastructure Bonds 2011A Series ( 7th Feb 2011 to 7th Mar 2011 )

Stay tuned to BelltheBull Blog for more news on various 80CCF Infrastructure Bonds !

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{ 11 comments… read them below or add one }

A K Mukhopadhyay March 2, 2011

Dear Sir,
I want to invest Rs 20000 in your bond. I am presently at Gurgaon (Sanjay Gram, near sector 14). I am originally from West Bengal. I am a retired person and presently staying with my son at Gurgaon. Please tell me what to do and whom should I contact for this investment. Urgent please.
Thanks.
A.K.Mukhopadhyay

Reply

khalid March 7, 2011

Sir,
For these Bonds you have to visit any bank and they will provide the form, either you can apply through ICICI Direct or some other sites like Share Khan or something.

Reply

Ashok Kumar Shrinagar March 7, 2011

I am to invest Rs.20000/- in your infrastructure bond.I am at Bhopal.
Kindly give me details of your outlets, if any at Bhopal to contact with or please ask your agents to contact me on 0755-2750190/ 09993813383.I am a retired person staying at Bhopal at C-30,Padmanabh Nagar,Bhopal-462023

Reply

khalid March 7, 2011

Sir,
For these Bonds you have to visit any bank and they will provide the form, either you can apply through ICICI Direct or some other sites like Share Khan or something.
Thanks for your visit here in Bell the Bull.

Reply

Narayan March 12, 2011

I have to invest 20000/- in infrastructure bond for income tax purpose.pl advise which one is available now and upto what date.also advise whom to contact as i am in shillong, meghalaya.

Reply

khalid March 12, 2011

Hi Narayan,

As shown in this post, PFC Infra Bonds are available for subscription up to 24th Mar 2011. Also you have to visit any bank and they will provide the form, either you can apply through ICICI Direct or some other sites like Share Khan or something.

Thanks for your visit here in Bell the Bull.

Reply

vinay verma March 15, 2011

I am in Gujarat, Dist-Kutch, City- Gandhidham.
Weather SBI bank branch is distributing PFC infrastucture bonds.

Reply

khalid March 15, 2011

Hi Vinay,

Yes you may collect the form from SBI or ICICI Bank as they both are the Book Running Lead Managers for these bonds.

Thanks for your visit here in Bell the Bull.

Reply

VENKATA RAMANA March 16, 2011

We are intrested in this bonds proculease, advise us the way.

Thanking you,
Venkata Ramana
98665630030

Reply

venkat March 19, 2011

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

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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