PTC India Financial Services Limited (PFS) is the state-run lender for utilities. Its a Navratna PSU company. PFS is promoted by PTC India as a special purpose investment vehicle to provide financial services to the entities in energy value chain, which includes investing in equity and extending debt to power projects in generation, transmission, distribution, fuel related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers and EPC contractors, etc. PFS also provides non-fund based financial services, adding value to greenfield and brownfield projects at various stages of growth and development.
The company plans to issue its latest Tax Saving Infrastructure Bonds under Section 80 CCF for subscription from 30th December 2011 and and the bonds will be available upto 16th January 2011. These bonds have interest rates almost equal to other recent issues. The company has proposed to raise Rs 1000 crore. The company has a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds. The bonds carry a coupon rate of 8.20% for 10 years bonds and 8.30% for 15 years bonds. These PFS bonds are redeemable, non-convertible long term infrastructure unsecured bonds having benefits under section 80 CCF of the Income Tax Act, 1961 for investment up to maximum Rs 20,000 for FY 2011-12, over and above the Rs 1,00,000 deduction available under Section 80C. There is no maximum limit on investment in such bonds.
Issue Details :-
Issue Period : 30th December 2011 to 16th January 2012
Security : Unsecured
Issue Size : Rs 1000 crore
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 10 bond
Lock-in Period : 5 years, 7 years.
Listing : Proposed to be listed on BSE
There are two options to choose from for subscribers of these bonds.
|Tranche 1 Series I||Tranche 1 Series II|
|Face Value||Rs 1000 per Bond||Rs 1000 per Bond|
|Maturity Tenor||10 years||15 years|
|Lock-in Period||5 years||7 years|
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.
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.
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