Close on the heels of the IDFC Infrastructure bonds – L&T is also issuing infrastructure bonds beginning October 15th 2010, and closing on November 2 2010.
L&T Bonds: Tax Saving Infrastructure Bonds
These are classified as infrastructure bonds under Section 80 CCF which means that investing in them will reduce your taxable income by Rs. 20,000.
This increases your effective yield because along with the interest you earn on these infrastructure bonds, you save on tax as well.
These bonds are good for a maximum of Rs. 20,000 as far as the tax saving aspect is concerned, so if you buy bonds worth Rs. 30,000 and nothing else, even then the maximum you can reduce from your taxable income is Rs. 20,000 because that is the cap on tax benefits on infrastructure bonds.
L&T Infrastructure Bonds Features
There are 4 series of L&T Bonds, and though these bonds have a term of 10 years, there is an option of a buyback after 5 years or 7 years.
The interest rates, and effective yields of different plans are shown below:
| Series | Tax Bracket | 1 | 2 | 3 | 4 |
| Face Value | —- | Rs. 1,000 | Rs. 1,000 | Rs. 1,000 | Rs. 1,000 |
| Interest Payment | —- | Annual | Cumulative | Annual | Cumulative |
| Interest Rate | —- | 7.75% | 7.75% | 7.50% | 7.50% |
| Maturity | —- | 10 years | 10 years | 10 years | 10 years |
| Buyback in years | —- | 7 years | 7 years | 5 years | 5 years |
| Yield on Buyback | 30.9% | 15.23% | 13.59% | 17.20% | 15.75% |
| 20.6% | 12.31% | 11.36% | 13.42% | 12.58% | |
| 10.3% | 9.86% | 9.44% | 10.23% | 9.86% |
L&T Bonds Minimum Investment
The minimum investment needed for you to invest in these bonds is Rs. 5,000 because you have to apply for a minimum of 5 bonds, and the face value of each bond is Rs. 1,000.
Open and Close Date
Subscription opened on October 15th, and will close on November 2nd 2010.
Credit Rating
The L&T bonds have been rated CARE AA+ by CARE and LAA+ by ICRA which indicate high credit quality and that the rated instruments carry low credit risk.
How can you invest in the L&T Infrastructure bonds?
You can invest in these bonds either in the physical form or electronically through brokers like ICICI Direct. You can buy a form through one of the several agents across the country and invest in it through them as well.
Here is a list of banks listed on their website that can give you more information as well:
- Axis Bank
- DBS Bank
- HDFC Bank
- HSBC Bank
- ICICI Bank
- IDBI Bank
- ING Bank
- SBI Bank
They also have this cool link on their special website for this bond where you can enter in your contact details and they will contact you and help you.
If any of you do decide to contact them then I am really interested to know your feedback because I tried to get in touch with the numbers given in the IDFC website, and tried at least 10 times to no avail. I’d like to know if this is any better.
Tax on interest earned from the L&T Infrastructure bond
The interest itself is not tax free. It’s only the Rs. 20,000 you get reduced from your taxable salary that helps save tax.
L&T Infrastructure bonds to list on NSE after 5 years
The Bonds are proposed to be listed on NSE, and can be traded after the initial 5 years lock-in period. After this lock-in period, the holders can also pledge the Bonds with banks for availing financial assistance.
You don’t need a demat account to invest in these bonds
L&T will offer you the option to hold the Bonds either in Dematerialized or Physical Certificate form.
NRIs can’t apply in the L&T Bonds
Non-resident investors including NRIs, FIIs and OCBs are not eligible to participate in the Issue.
Conclusion
These were some salient features of the L&T bond issue, and I hope you found this useful in order to make a decision on whether you want to opt for them or not. Keep in mind that IDFC has a similar issue running, and if you have already applied for that then you won’t get any additional tax benefit (over Rs. 20,000) by applying for this issue as well.
If you have any questions, leave a comment, and the community here will try to answer them for you.
23.03.2017
Dear Sir/Madam
I have purchased L&T long Term Infrastructure Bond 2011A series (in Paper form) with folio no. 10145481 Certificate no. 514548 by paying Rs.20000/-
As per the document lock in period is 5 years and which was due in March 2016.
I do not think I have received any intimation for redemption even after 1 year.
No contact numbers are working given neither on L&T Bond or sharepro services I Pvt Ltd. It is very sad.
I could not en cash the interest you sent me in 2015 due to some reasons.
Please let me know the process and procedure to redeem the debentures including the above interest at the earliest. .
Thanks
Madhavan Namboodiri N.M.C.
[email protected]
9322259037
Pl tell the procedure to buy back L&T Infra Bond invested in 2012. And I have the physical Bond available with me.
Hi I am geeta and I purchased infrastrucure bond of Rs. 20,000/- and my lock in period is over on 24th March 2017 then how I get my money and what i have to do
Hi. I had purchased L& T infra bonds in March 2012. How can I add them to my Demat account.?
hi,
I have purchased L& T Infrastructure bond(folio no – 20087731) 5 years back on 10/01/12,which is going to be matured on 09/01/2017.i am not able to contact any phone (or)email which is present on bond paper.
please update email id and contact no.
my email id – [email protected].
Hi L&T Infra Bonds,
This is Gopi from Hyderabad. I have applied for L&T infra bonds (L&T Infrastructure Finance Company Limited) on 10/Jan/2012. Money (20,000) was deducted from my account.
I am not sure if i have received any documents for the same or not as i could not find them in my repository. I might have misplaced those
Can you please let me know the what should i do now ? I don’t have any documents related to L&T infra Bond except the application number and the payment details. Below are the details of the application.
Application No : 51004023
Name : Nallamolu Gopinath
Date of Birth : 10/Jan/1985
Applied for Infra Bonds on : 10/Jan/2012
Cheque No : 932191 (HFDC Bank)
Hoping to get a solution on for this.
Regards,
Gopi
I am suffering from same problem. What is to be done? pl inform me. Thanking you,
I have invested Rs.20000/- in L&T long term infrastructure bonds 2010A series for tax saving purpose in 2010.
Now after 5 yrs I want to redeem those bonds. ( I have physical certificate with me)
What is the procedure for redemption ?
Regards
I have invested Rs.20000/- in L&T long term infrastructure bonds 2010A series for tax saving purpose in 2010.
Now after 5 yrs I want to redeem those bonds. ( I have physical certificate with me)
What is the procedure for redemption ?
Regards
Dear L&T Infra Team
why information not available on Website , how to Redeem infra bond after looking period.
i m trying to contact L&T and agent contact no from last 15 days but no one
respond to any of nos .
expecting this will be corrected and expecting someone will contact me
ASAP
I could not submit the form for buyback of Long term Infrastructure Bonds 2011A series since I surpassed the due date for submission.How can I sell the bonds in open market?
I have purchased 20 nos. of L & T Infrastructure Bonds each @ Rs.1,000/- vide Application No.58805395 dated 10.02.2012. Please let me know about its maturity time with value.
Thanking you.
I have invested Rs.20000/- in L&T infrastructure bond for tax saving purpose in 2010.
Now after 5 yrs I want to redeem those bonds. ( I hv the physical certificate with me)
What is the procedure for redemption ?
Regards,
BS
Hello,
I bought infra bonds in 2011. How can I redeem it and can get my money now.
Please advise.
i was allotted 20 infra 2010A series bonds. the physical certificate could not bw delivered as the house was closed. However they were also not transferred to my demat account, now as it has matured and buy back option is available, kindly transfer the maturity amount to my account.
Application NO:44626591
Ref ur letter:SH/LTINFRA/2011/MR-1009/3775-621 dated:12.02.2011
Mob:9428007090
I could not submit the form for buyback of Long term Infrastructure Bonds 2011A series since I surpassed the due date for submission.How can I sell the bonds in open market?
I want to en cash my matured L&T Bond immediately,please inform
through my mail process of encashment.
rg paymente of long term infrastructure bonds 2o10A SERIES
REGD FOLIONO00102938CERTIFICATNO406139
PRAFULKUMAR BABUBHAI DAVE
SERIES4
TWENTY ONLY
1408435 _1408454
DATEOF ALLOTMENT02-12-2010
Dear Sir,
I had invested in L&T INFRASTRUCTURE BOND 5 years back and wanted to know what is the status of my investment??? My PAN no. Is AUNPK5667Q…… can u pls help me ìn any ways
Dear Gautam
Is this L & T Infra Bond has listed was it for 5 Years and did you get the interest since yesterday i got Interest of 1800 as rate of interest is 9%
Dear Sir ,
I PURCHASED 20 L& T INFRASTRUCTURE BONDS IN 2010 . Today my broker Indiabulls told that they sold 20 bonds @1280/- as there was no transparency it is difficult to understand who is the cheater my broker or L&T . What about the 7.5% interest which was assured ?? was that a bluff ?
I have other 20 bonds buyback due on 1 st January 2017 with a promise to give 9.% interest ? I want to know how may I get 9% interest . Please reply.
regards
Gautam Chowdhury
Mob. No 8902159636