Also read about the REC Infrastructure bonds here or the IDFC Infrastructure Bonds Tranche 2 here.
Update: There has been a change in terms, and you can now invest in these bonds in physical form also. Here is the link to relevant IFCI page.
The issue has been extended till January 12 2011
The IFCI Infrastructure bonds are the latest infrastructure bonds to be issued with the 80CCF benefits, and are the second tranche from IFCI, which issued them earlier this year as well.
The IFCI bonds are issued with section 80CCF benefits which means that they will get you a tax benefit of reducing your taxable income over and above the Rs. 100,000 under Section 80C with a cap of Rs.20,000.
The issue has been rated “BWR AA†by “BRICKWORK RATINGS INDIA PVT LIMITED†which means that they are rated as instruments with high credit quality.
Here are some other details about them.
IFCI Infra Bond Options
There are 4 series that you can choose from with a combination of getting interest paid annually, cumulatively, and having a buyback or not.
Here are the details of the 4 series.
| Options | I
Buyback & Non – Cumulative |
II
Buyback & Cumulative |
III
Non Buyback & Non – Cumulative |
IV
Non – Buyback & Cumulative |
| Face Value | Rs. 5,000 | Rs. 5,000 | Rs. 5,000 | Rs. 5,000 |
| Buy Back Option | Yes | Yes | No | No |
| Coupon | 8.00% per annum | 8.00% compounded annually | 8.25% | 8.25% to be compounded annually |
| Redemption Amount | Rs. 5.000 | Rs. 10,795 | Rs. 5,000 | Rs. 11,047 |
| Buyback allowed after | 5 years | 5 years | NA | NA |
As you probably noticed IFCI didn’t show yields in the same manner as L&T and IDFC, where they took the tax benefits based on various slabs and showed yields at different tax slabs and interest payments. This is probably a good idea given the various limitations of the way those yields were calculated.
How does the IFCI infrastructure bond buyback option work?
At the time of selecting a series you have to select either series 1 or series 2, which allow the buyback after 5 years lock in period. To exercise the buyback you have to write to IFCI to request it, and this has to be done in the month of November for the year when you want to exercise the buyback.
Open and Close Date of the IFCI Infra Bond
Opening date of the issue: November 16th, 2010 and Closing date of the Issue: December 31st ,2010. They can close earlier as well if their entire demand is met.
Is a Demat account necessary to apply for the IFCI Infra Bond?
Yes, right now it is necessary to have a demat account to apply for these bonds as they won’t be issued in physical format. Even the IDFC bonds started out as Demat only, and were later on changed to allow physical forms also. The target sum to be raised by IFCI bonds are much lesser than the IDFC ones, so they might not feel the need to change and include the physical format as well.
Will tax be deducted at source from the interest payment?
These IFCI 80CCF bonds will not attract TDS, however the interest itself is taxable at your hands. So, the bonds don’t attract TDS, but it doesn’t mean they are tax free.
Will the bonds list in a stock exchange?
Yes, IFCI plans to list these bonds on the Bombay Stock Exchange (BSE), but from reading the information memorandum it seems to me that you can only sell these bonds after the lock in period of 5 years.
Can NRIs invest in the IFCI Infrastructure bonds?
NRI customers are not eligible to apply for the issue.
What if you have already bought another infrastructure bond?
If you have already bought another infrastructure bond, and exhausted the limit of Rs. 20,000 then you won’t get any further tax benefit by buying this bond. There are also several banks that offer 8% interest for terms less than 5 years, so you won’t get much value out of locking your money in this instrument for 5 years.
How can you buy the IFCI infrastructure bonds?
You can buy these bonds through your broker like ICICI Direct, or can submit an application form in one of the bank branches that are accepting them. The information memorandum lists down a large number of HDFC bank branches so you can go to one near your house, and they might be selling the bonds or can at least tell you where you will get them.
Should you wait for another issue?
This issue is 50 basis points, or half a percentage higher than similar L&T bonds issued earlier, and reader Amit Khandelia actually left a comment about LIC coming up with a future issue, and possibly even offering term insurance free with their offer.
IDFC has also indicated interest in coming up with a future issue, so they might come up with another issue too.
The advantage with waiting is that you may get a slightly higher interest rate, maybe half a percentage or one percentage more, but as I said earlier if you’re able to wait and get a bond which offers a percentage higher, and you invest the maximum Rs. 20,000 in it – that means an additional 200 bucks extra in a year; what is that worth to you? How many hours of Googling and speculating is it really worth?
The advantage of getting it now is that you can get this one thing done with, and have plenty of time to receive the certificates for tax proofs or whatever else you need.
This is a personal decision really, but something worth keeping in mind the next time you speculate on whether you should wait or go ahead with it.
Please leave a comment if you have any questions or observations.
I have invested Rs.20000/- in IFCI Inf Bond vide Appl No.3010202 dt 30.12.10, but I didn’t receive original bond so far.
hi,
You can actually check the status of your bonds online at http://www.beetalfinancial.com/bond.aspx.
I have not received my bonds yet but it says bonds allotted in physical form. Advice sent.
Thanks for that info Priya.
dear sir,
i had applied for IFCI bond by paying amount 10,000/- chq date 24/12/2010.
my application no 3042186.
till today no allotment had been made.
kindly confirm the allotment
jagdish
Hi,
I checked the allotment status through the URL http://www.beetalfinancial.com/bond.aspx. It says I have been allotted the units but in physical form even though i had applied for demat form. Any idea why? And what Am I supposed to do once the bond matures, i mean how do I encash it?
Hmmm sounds like there was a mistake in filling the form or something. I’m not sure if you have to do anything extra for payment on maturity. From what I remember they will credit the same account that they are paying you interest on at the time of redemption.
Thanks for the reply Manshu but any idea when I will get the physical Bond. I havent received it yet even though the status says the advice already sent.
I really don’t know about that Prabhu.
Hi all,
I have a query.
I appliled for 2 bonds of IFCI in series II option II.Got them allocated in my DP too.
Today when I see my bank account with HDFC it shows a credit of Rs 37 against IFCI infra structure bonds.
If I am right I had opted for cumulative option so no question of interest.
So can anyone tell me if similar thing happened to them too ?
Or what exactly is this amount for.
Any help is highly appreciated.
I have received INR 79 from IFCI. Not sure for what. 🙂
Gopal,
You applied for annual interest option of the cumulative one?
Gopal,
You applied for annual interest option or the cumulative one?
Hey guys ,
I have sorted out the confusion.In the information memorandum available on the link “http://www.ifciltd.com/Portals/0/IFCIInfraBondSeriesII-IMFinal.pdf” on page no 13 it says
“interest on Application Money, to the
extent of allotment of bonds, shall be paid from the date of credit of this money to the bank
account of IFCI to the date immediately preceding the deemed date of allotment at the
respective coupon rates.”
So the amount received in our bank accounts is actually the interest on the application money from the date of applying to 30th jan 2011.
🙂
Thanks people for listening me out…
Great job on solving the mystery Kapil 🙂
Dear ALL,
After posting here on Feb 13th, I wrote to my Dmat provider ICICI with all the details. They answered me immidiately, which I am giving here. Those who didn’t get the demat credit, pl contact your service provider. I am satisfied with the answer from my service provider.
“Dear Customer,
We understand your concerns.
The 4 units of IFCI LIMITED OPT- I 8 LOA 31JN21 FVRS5000 are credited in your Demat Account IN*********** on February 10, 2011.
These units are in Lock in period and you would be unable to view the same under demat allocation at http://www.icicidirect.com. However, you would be able to view your holdings in IDFC bonds by following the below mentioned path:
1. Log in to http://www.icicidirect.com.
2. Click on FD/Savings.
3. Click on hyper link FD/Savings Demat balance.
The security name will be currently displayed as NA as the Bonds are not tradable.
Further, the holding statement for the month of February 2011 will be sent to you by March 05, 2011 which would reflects its credit details. Hence, we request your co-operation in the interim.”
Good luck to all of you! 🙂
Very nice of you to share this piece of info. Thank you.
Great – thanks for sharing!
I have applied for physical form.But I have changed my address which I have given in the form.How can I get the Bond sertificates.Please suggest.
My application no is also 5 digit .And I have got the allotmate.
i SHRIRAM JANARDHAN PAUNIKAR submitted ifci bond application for rs 10000 on dated 08.01.2011 in physical form. my application no. is 52033. i have not got any bond certificate till now. when i will get the bond certificate?
Check your status with this link that Ravi shared earlier, and talk to your agent or banker if you see that the bonds haven’t been allotted.
http://www.beetalfinancial.com/bond.aspx
Check with the agent that helped you buy this bond – also your application number doesn’t seem to be correct based on what others are sending the number is six digits whereas your number is only 5 digits.
I had applied for 2 (Two) IFCI Tax Saving Long Term Infrastructure Bonds– SERIES II vide Appln. No. 576782 Dt: 30.12.2010, Cheque no.367858 (rs.10,000/-).
No debenture thereof was received in my Demat a/c till date.
My DP is pledging helplessness in the matter.
My DP is pledging helplessness in the matter.
Soma – this links shows that your bonds were allotted so I think you should re-check your Demat account, and see that you’re seeing at the right place.
http://www.beetalfinancial.com/bond.aspx
Hi There,
you can check the status using this link
http://www.beetalfinancial.com/bond.aspx
but not sure about alotment sheet, i need it for IT Proof.
This is really awesome Ravi – thanks a lot for sharing this – there are so many people looking for IFCI information that this will be an extremely useful tool. Thanks a lot – much appreciated!
I got the soft copy of alotment sheet from beetalfinancial. I called them and gave the form number and they sent it with in 1 hour. this sheet is useful for tax proof.
Thanks for that info again Ravi – I created a post out of the info you sent as this is really useful, and will help a lot of people.
Thanks Ravi, the link you posted helped me to check that I have already been alloted and that gives a sense of relief. Thanks very much for your help. I am sure there are many like me who will find your link helpful and breathe relief.
I dont get any responce from your company even after more then 30 hours.. Is that cheating or what .. I wana reply please..
Form no: 3279738, applied on 12th Dec, 2010…. didn’t get any response from them. Neither in physical form, nor in demat! Delhi office playing every day. Called 011-41792800 & 26487444… they are saying every day either today or tomorrow! Finally told everything is over… pl call Mr. Sekhar or Namita on: 011-29961281/2/3…. whenever I am calling they are holding the call for 5 mints and saying no body in their seat!!! Don’t know whether my 20K got cheated or not! Pl help:(
Form no: 3279738, applied on 12th Dec, 2010…. didn’t get any response from them. Neither in physical form, nor in demat! Delhi office playing every day. Called 011-41792800 & 26487444… they are saying every day either today or tomorrow! Finally told everything is over… pl call Mr. Sekhar or Namita on: 011-29961281/2/3…. whenever I am calling they are holding the call for 5 mints and saying no body in their seat!!! Don’t know whether my 20K got cheated or not! 🙁
Hello,
i think you need not to worry and no need to panic.
Contcat the registrar of issue with all your details via E-mail.
HEMENDRA BHIKHALAL JAIN
FORM NO : 2621280
DATE:28/12/2010
APPLICATION FOR 4 BONDS RS.20,000/-
I have neither received bond in physical form nor in Demate Account.
As more than one month is OVER ,please immediately look in the matter and SEND THE CERTIFICATE.
Talk to your agent or whoever sold you instead of wasting time writing comments on blogs.
That is correct. We are also customers just like you. It is better to contact the IFCI on their number.
I already contect them. They just wasted time to transfer the CALL.
Have u got my prev mail…..pl reply soon
I applied for 3 bonds on 19-12-10.
But i have not received the Bonds yet.( physical)
By what time i will get the bonds, may i know?
Hi Priya,
I had also applied for physical only. Haven’t received in physical form yet, but it is now showing in my Demat account. Can you check the demat account that you had provided in the form? It must be there by now. Also, I had applied on last date only. So, if I am allotted, everyone should also be allotted.
Finally it is showing in my Demat account. 🙂
Hi Gopal
Can u please let me know where exactly in our demat account , this bonds we will be able to see. I have a ICICI direct demat account.
You can see in ICICI bank site demat holding
Hi Anurag,
It will be shown in your demat account in corresponding bank net-banking site. For my case it is HDFC bank, for my brother’s, it is shown in his ICICI demat holding.
I think demat holding statement can be used for tax benefit purpose.
Some other people have also left comments stating that they have been able to do so.