This calendar is for last year’s bonds, and you need to go here to look at the 2011 80CCF Infrastructure Bond Calendar.
A lot of you are interested in the next infrastructure bond issue, which helps save tax under section 80CCF, and since I didn’t find any consolidated information anywhere I thought I’d create this post with a list of the infrastructure bond issues that are expected to come out in the market in the next few months.
This was also triggered by the fact that ICICI Direct has started offering the IFCI Infrastructure Bonds series – II already, and it looks like these bonds will be available till December 31st 2010.
I couldn’t find their prospectus, and the page on their website that should hold details about the issue is actually blank! So I don’t have a lot more details right now, but will write a post once I get more details.
Here are the bond issues that I’m aware of.
| S.No. | Name of the issuer | Expected Time Frame |
| 1 | REC | January 12th 2011 – March 31st 2011 |
| 2 | IDFC | Issue re-opens on January 17th 2011 |
| 3 | IIFCL | Feb 4 2011 – Mar 4 2011 |
| 4 | L&T Infrastructure Bonds |
Second tranche in February- |
| 5 | Power Finance Corporation (PFC) | |
| 6 | IFCI | November 16 2010 – January 12th 2011 |
| 7 | LIC | There are reports that this issue may not happen this year. |
If you know of any other please leave a comment and I’ll update the post.
I want to buy infrastructure bond to save my tax (2011-12 financial year). I am looking for an agent who will help me to buy this bond. Please call me on +91 9810244072
HI, GIVE A ALL LETEST BOND INTREST RATE OF F.Y
I am gonna subscribe IDFC. There are a few reason for that.
1. I don’t wanna miss this opportunity for saving due to delay in arrival of certificates, so have to buy before 31 Dec 2011.
2. Interest rate is higher and probably will remain same for coming offers from other players.
3. Rating are good as compared to previous offers.
4. Would definitely love to opt for LIC but am unsure if such an issue will be in market this year.
I have one apprehension. Should I go for cumulative or annual..? Are interest paid annually tax free..?
Interest paid annually is not tax free. It is taxable, and so is the cumulative sum – that’s also taxed acc to interest rules. It depends on what you prefer but with the high inflation and opportunity to reinvest the interest at a higher amount, I’d personally prefer the annual interest option.
Hi and Infra bonds are expected in November ,any Idea?
I don’t know of any new issues but you might want to take a look at the existing issues that are open. Here is the more recent post on that. Click on this link to see the various options open right now.
http://www.onemint.com/2011/09/22/80ccf-infrastructure-bonds-calendar-2011/
At present today’s date (18th July,2011) which company’s bonds are available for tax saving?
There is no infra bond available for sale right now. I think you will see new issues around November or so.
Hey,
Any idea when Infra bonds for fiscal 2011-2012 will start comming? Also, which are ecpected companies to offer their bonds?
Any info will be highly appriciated.
Thanks,
Glad.
Glad – That info is not out yet, I’d be surprised if they do launch now since we’re so far away from the tax season, and these bonds only pick momentum near the tax season.
I understand. But please keep posted in case any news you come across. Would share in case I come to know anything about this.
thanks again,
Glad
Sure, will do Glad. Thanks!
For financial year 2011-12 Iwould like to invest in long term infrastructure bonds, can I know the next issues, of LIC,REC,IDFC OR L& T INFRA. Pl. help
Regards,
T.Ravindra
They haven’t been declared yet, and I don’t think they’ll come out so soon with them. But when they are declared you are likely to read about them in the papers, and I will cover them as well.
i want to buy urgent infra bonds now. pls help!
my email id is [email protected]
or call me at 9768644052.
regards
Naveen
Hello Manshu,
Thanks for starting this post.
Can you please tell me about the bonds still open along with the interest rates that will benefit me in tax saving for the next assessment year(2011 – 2012). Are the tax saving FDs better?
Vandana – PFC is open for another day and I think the next issue of IDFC will be open till the end of this year.
So, based on your question it looks like your 1 lakh limit under 80C hasn’t been exhausted yet. If that’s the case then you can get a tax saving FD done as that can be done with lesser hassles, as a lot of people have had to struggle with getting tax receipts and such.
I want to invest Rs 20000 in Power Finance corp Infra bonds closing on 22/3/2011.Can I get a firm allotment? If not how the allotment is done?
http://www.idfc.com/infra-bonds/scheme_features.htm
Another 80CCF issue.
Thanks for that info Nayan.
L&T Infra Bonds (L&T INFRA 2011A SERIES : LTINFR) opened today & are available until 7 March 2011.
Finally, I know that in IDFC, C stands for Company & not for Corporation. It clarifies my doubt about IDFC being a private company & not a Govt. company.
🙂
Hi manshu,
It’s not releated to infrastructurebonds… It’s related to a company which got liquedated…
My father invested in shares long back “It is Alsa housing and construction limited”. May be around 1993… When i saw it in quotes… I am gettting information as company was liquedated… Is there any possibility to get the money…
This is not only for the company specific. But, what to do if such case happens.
Thanks,
chandrasekhar G/.
As far as I know nothing can be done about this. There are some brokers who buy shares which are in physical format at a discount, but the company is still in existence.
If this company is not in existence then the shares are likely worthless. So, I don’t know of a way to get you any money out of it.
Thanks for the reply…
I suppose the IIFCL issue opens on 4th Feb 2011 and closes on 4th March 2011
Thanks Girish – I’ll update the post with this info.
Thanks. In fact I was deceived by the name of the company. I was always under impression that companies having names ending with “corporation” are Govt./Public Sector Companies e.g. LIC. Anyway, no harm done if my Rs. 20000/- are safe & will be refunded after 5 years. Anyway, it may help if you can mention
the type of company (Govt./Public Sector/Private) for each company in your
tables. Thanks again. RAKESH
History of past infrastructure bond issues :
Issue Closed on ROI 5 Yr ROI 10 Yr Rating
IFCI-1 31/08/2010 7.85 7.95 BWR AA
IFCI-2 31/12/2010 8 8.25 BWR AA
IDFC-1 18/10/2010 7.5 8 ICRA LAAA
L&T 15/11/2010 7.5 7.75 (7 Yr) ICRA LAA+
Present issues :
IDFC-2 04/02/2011 8 8 ICRA LAAA
REC 28/03/2011 8 8.10 ICRA LAAA
Annual yield for a person in 30% tax bracket is 16.5% (when opted for 5 year buy-back option). And, this is the maximum yield one can get across 5/7/10 years tenure, and 10/20/30% tax brackets.
As per Valueresearch.com, average yield over last 5 years was around 14% for Tax planning funds category, with the best fund in the category giving 22%.
Nifty/Sensex yield has been around 16.5% over last 5 years.
Therefore, one can take exposure in infrastructure bonds, but should limit oneself to Rs. 20,000 only. If you are not able to invest in infrastructure bonds now, you should not worry. Instead, start investing in good funds for 5-7 years term.
Parag,
Thanks for providing these details, but let me point out that comparing bonds to equity is like comparing apples to oranges because one is debt and the other is equity. Comparing returns is one thing, but then you need to keep in mind risk as well. It’s common for equity to lose in value a lot in a little time, whereas debt instruments provide a lot more safety, so these are two different things altogether.
Completely agree with you, Manshu.
Keeping in mind the rate of inflation, and the risks in equity, it will be advisable for persons in 30% tax bracket to invest in these bonds. But, for lower tax brackets, these may not be so lucrative.
BTW, with the recent hike in repo & reverse-repo rates, I would be happy to see a bonds issue with ROI of 8.25%. Any idea when PFC & IIFCL issues will come ?
I’ve been hearing March Parag – so let’s see. Anyway the excess of 25 basis points on 20 grand is just 50 bucks an year, so not that much in absolute terms.
Manshu,
While IDFC issue is a “public issue” of “secured debentures”, REC’s issue is “private placement” of “unsecured bonds”. Does it make any difference ?
I wish to apply for infrastructure bonds . Which company bonds are best, flexible and safe secured. Is L&T infrastructre bonds are coming soon? Any Govt or public sector bonds are in pipe line? pl inform
Regards
akgupta
REC which is a Navratna is currently open, so you can look at that. Terms of most of these issues are similar, so if you feel comfortable in a government enterprise then REC bonds are something to look at.
Today one of my friends told me that IDFC is a private sector company. I was under
impression that it is a Public Sector/Govt. Company. Kindly suggest. Kindly also suggest how safe it is to invest in this company?
That’s right that it is private sector. The bonds have got the highest credit rating from ICRA, and since these are secured bonds there is a high degree of safety.
But if you’re not comfortable then you can always go for REC which is a Navratna.
I feel that main reason to apply for Infra Bonds is not earning higher interest rate but
to get benefit under 80CCF which makes the effective interest rate very high. If benefit under 80CCF is not the main reason for applying for these bonds then I guess
investments in Bank FDs, MFs or Shares may yield better returns.
Yes Rakesh – that’s right in my opinion. However, it’s not correct to compare equity mutual funds or shares with these bonds because they carry a much higher risk when compared to these bonds.