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 purchased 4 bonds through ICICI direct.com but till date i have not received interest amount of Rs. 8,000/- which was realised as on 31st Jan., 2016. Please clarify
I am having 4 IFCI bond series 2011 in (de mat form ) serial no INE039AMU6 my lock period 5years I.e after 31.01.2016. How can I sell .Please reply me on my mail ID [email protected] or mob no 9467109558. Thanks with regards. Sarla Nandwani
I have IFCI bonds 8.0 310121 ( INE 039A09MT8 ) in demat form . On maturity , whther it will get automatically credited to the bank account or we will have to apply separately. Please confirm Maturity date .
I have IFCI bonds (INE 0139A09MT8)in demat form . On maturity , whther it will get automatically credited to the bank account or we will have to apply separately. Please confirm maturity date also.
I have IFCI bonds in demat form . On maturity , whther it will get automatically credited to the bank account or we will have to apply separately. Please confirm.
I have IFCI bonds in demat form . On maturity , whther it will get automatically credited to the bank account or we will have to apply separately. Please confirm
I have IFCI bonds in demat form . On maturity , whther it will get automatically credited to the bank account or we will have to apply separately. Please confirm
SIR, GOOD MORNING I HAVE IFCI LTD – OPT – II – TAX SAVINGS SCHEME /31 JAN 16 BONDS (5) IN DEMAT FORMAT. NOW I WANT TO REDEEM THE SAME WHAT SHOULD I DO ALSO I WANT TO UPDATE MY BANK DETAILS KINDLY ADVISE ME THE PROCEDURE. TO WHOM SHALL I SUBMIT THE DOCUMENTS AND WHAT DOCUMENTS AND WHICH FORMATS ETC. MY email address is : [email protected] which may please also be updated at your end. THANKS
Can anyone kindly tell me how to get the redemption amount of the IFCI tax saving bond 2010 option I , the redemption is due on 15th September 2015.
Dear Sir,
I have purchased 04 no. of Infra bonds bearing Application no 2198642 Dated 12/01/2011. My other information is as below –
Name – Mahaveer Rayagonda Patil.
E Mail ID.- [email protected]
Mob. No. – 8275258036 , 9881008222.
Folio No./D.P.ID No.2087224.
Old Address – Mahaveer Patil. At & Post Aitawade Budruk Dist Sangli.
New Addrees -Mahaveer Rayagonda Patil. “Veetrag” 8/207,
Opp. Chougule Petrol Pump, Kameri Road, Kisan Nagar,
Islampur-415409, Dist Sangli. (M.S.)
Old Bank A/C. No. 1000135160000172
New Bank A/C. – 1004310030001834.
RBL Bank Ltd. Br.GaonBhag Sangli. IFS code- RATN0000043.
But I have not received any bond/ Certificate from IFCI Ltd. Interest of Rs. 75/- for the period ended 31/01/2011 is received only.
Please change in the address and Bank A/C. No. & send the Bond certificate.
REPLY.
My application form No. is 816575, dated 23/1/2012, paid Rs. 20,000. I have not received anything from IFCI LIMITED, New Delhi. I have even not getting the status of the same.
Sir,
i am very sorry to say you that i had invested the some of rs 20000/- in ifci infra bond in the year 2010. till date i can get regular intrest but therea re no any certificate of letter from you . as i have it quary so please arrange the same for the investment details. my pan no. AFUPP2940M AND INTREST AMOUNT CREDIT IN UNION BANK OF INDIA DHRANGADHRA BRANCH ACCOUNT CNO. 44042070000786 PLEASE ARRANGE FOR THE SAME AS A INVESTMENT CERTIFICATE OF LETTER AND OBLIGE ME
THANKS
BHIKHALAL RAMJIBHAI PARMAR
I purchased ifci infra bondseries 5th ?20000 bt till today i haven’t recv detail
Plse reply
I purchased ifci infra bondseries 5th ?20000 bt till today i haven’t recv detail
Plse reply
my mobile no 9493312989 name ashok kumar shukla.
i had applied the ifci infrabond 2011 but did not got about your corspondence details line your land line or mobile no, …
I HAVE NOT RECEIVE MY BOND CERTIFICATE. APP.NO.-2124437 PAN NO.-ADAPM0443Q DEMAT NO.-300394-16932939
hi,
I have bought INFRA BOND on with form no 292206 of 20000rs @9.9%on 2012 with chk no 557753. then I moved from Bombay to hyderabad 2012 dec and ddnt receive any ceritficate or comunication till then. during move I missed the acknowledgement slip so dont even know bond no.
couil you update me iwth the bond no. is it possible to send the certificate to my Hyderabad address?
thanks
if a investor dies then what is the procedure of geting refund of series four bond
I Bimal Kanti Nath , hold IFCI Infrastructure Bond whose certificate No.0101700 & Folio No. INB 010700 . So far intrest received in 1st year by cheque , now I wish to receive interest through NEFT in my saving A/C. Also send the filledup ECS Form to your Hyderbad offiece on dated 07.05.2013 , till date I have not received any acknowldgement or activated in ECS .
Please inform me .
Bimal Knati nath