A few people have commented about receiving an SMS for the Demat allotment of NHAI tax free bonds, and if you applied for these bonds, and haven’t got any notification yet, you should check your Demat account in the next few days and they will most probably show up there.
In the past I’ve seen people not getting to know about these kind of allotments till a long time because their phone number is wrong or something like that and unfortunately none of these companies seem to think it is important to tell people when they are going to allot the bonds or when they are going to list so people have to just keep an eye out for news sources and depend on others to see when others get it and then check their accounts.
The NHAI bonds haven’t started trading yet of course since they were just allotted yesterday and Shiv found out that PFC bonds were listed in the wholesale segment which is a bit unusual. So watch out on Monday to see how they list and where the trading occurs.
Thanks to Amlan Basak, Shiv, Ravi and Bhaskar for sharing this information in comments here. Bhaskar and Shiv also mentioned that they got full allotment – I am not sure if this is applicable to everyone in the retail category but that might well be the case.
If not too much trouble can others who applied for the NHAI issue also leave comments to let everyone else know if you got the allotment or not and what percentage did you get. This not only helps keep track of what happened in this issue but helps make guesstimates for future issues as well.
Is there a lock-in for 10 yr PFC bond, I am not able to send it in secondary market
Not that I’m aware of.
There is some confusion about the coupon rate.. the article say 8.2% while the NHAI website says http://www.nhai.org/bonds1.html 6% so what ist it? Pls advice
Hi Nidhi
There is no reason for any confusion here. There are two kind of bonds. NHAI offers 6% interest on Capital Gain Bonds u/s. 54 EC. These are Tax Saving Bonds and the interest earned is taxable.
8.2% Tax-Free Bonds are pure investment bonds which dont offer any tax exemption. Its just that the interest earned is tax free.
Dear Sir,
Pls guide me as to the investment to get pension of Rs.5000/-p.m at the age of 60.
Date of Birth; 30-08-1962 & at the age of 58 DOB: 28-11-1958
Thanks
Karmali
PFC bonds got listed today on bse
Shivji,
Since I will continue to get 8.3% interest on bond & OD interest is 12.5% as such net annual outflow is approx 4 % i.e rs 40 per bond.In case the annual appreciation in bond is more than 40 rs then I would be in benefit.
Now the question is how much it could be in excess ? What has been the SBI bond experience over 1 year ?
Since interest rates are at peak currently,growth rate has fallen to sub 7 % level as announced 2 days back & have not been cut even once what could be the interest rate cut expectation? In view of the same what should be my selling price & time period?
Further I think these tax free bonds at such an attractive rates of 12 % for Highest tax bracket have come for the first time in Indias history .Correct me if I am wrong.Also it will attract lot of buyers who would buy it cum interest, enjoy the tax free interest & sell ex interest thus enjoying short term capital loss.
Further if one invests the tax free interest in stock market or good MF at expected return of 15 % which coupled with 12 % interest rate can make it a safe bet to pledge the bond with banks/FIs .Wouldnt it implies a better return by just holding on even on OD money?
Views invited.This could be the query of several investors like me who have invested on borrowed money & are pondering what to do?
Hi Saharanpuri… I dont think it is advisable to hold on to NHAI Bonds with your OD running at 12-13%. Even if your NHAI Bonds give you 15% returns in the next one year, I would say that you should not play with any unforeseen event, which could turn the tables against your strategy of making money with falling interest rates. It would be a very small gain vs. some risk of interest rate rise. Though the probability of interest rates falling is quite high, what if it does not materialise due to some reason like rise in crude prices or severe monsoon failure or commodity price rise or any other reason.
Then comes the point of selling your laggards for holding these bonds. What if your laggards rise 50% in the next 2 years ?? We all know equities provide maximum gains in the long term & you never know when your laggards start running like horses.
Now comes the point of HUDCO Bonds in the NPO vs. NHAI Bonds in the secondary markets. I completely agree with you here. If I need to invest, say Rs. 5 lakhs, in one out of these two options, I will definitely go for NHAI Bonds from the secondary markets… still. The overall response has been poor for HUDCO and it could potentially create liquidity problems for the investors and see dearth of buyers post listing. I agree with you that the returns will be more in NHAI Bonds vs. HUDCO Bonds. Also, I have a feeling that HUDCO will open in the Red on listing.
Sahranpuri,
I completely agree with Shiv.Wait till Tuesday close & check if RBI announces any OMO.If there is an announcement bonds will rally & the NHAI bond premium will also rise.So my suggestion is sell on Wednesday.If you remember I suggested chittorgarh site members to book SBI bonds at 5 percent premium.Till 2 weeks back the SBI bond premium was less than 5 percent , it was hovering around 3.5-4 percent.The same money can be used in several other better options.For one the person who has sold SBI bond at 5 percent premium has made additional 5-6 percent in NHAI (Including Commission).Also Include money made from FPOs etc which were all safe.So you will get much larger returns by selling out.
I have been allotted NHAI bonds & now views invited from fellow friends.
If it was my own money I would have definitely held on for a long time.I have used my OD limit @12-13 % n applied .Now I am getting a total gain of 25-27000 Rs per application against interest cost of 5-7000 rs per application of 5 lacs.This acts as booster of increasing portfolio with original portfolio remains intact.
Now the question is now of selling it at what price & when in view of falling interest rates ?
RBI may announce its quantum of purchasing bond thru OMO route next tuesday which shud lower the interest rates.
2nd option is of selling my laggards like NHPC,Ramky,OIL n others n replacing them with NHAI Bonds .
3rd option is of continuing to hold them with expectation that capital gains in Bonds will be more than interest cost for 1-2 years
Also in view of very low premium existing on HUDCO bonds & lower rating of AA+ n that too by not very brilliant CARE shud we think of applying in HUDCO bonds?Cant the return be better by simply holding on to NHAI bonds.
Views invited on which option to follow
saharanpuri,
Can you please explain what is OD? Is it provided through a bank account or brokerage account? Thanks.
OD is Overdraft provided by a Bank. It is a credit facility arranged by you with your bank against some securitised collateral like your own Fixed Deposits with the Bank, Shares, Real Estate, etc. The rate of interest payable by you on the OD can be negotiated. It is different from a fixed loan from a bank because an OD applies to a bank account and interest is payable by you only when you use the OD funds and that too only for the exact number of days for which you use the funds.
Hi All NHAI Tax Free Bond Investors… NHAI N2 Bonds list at Rs. 1035, touched a high of 1041.40 & a low of Rs. 1032… Trading at Rs. 1040.10
http://www.edelweiss.in/Debt/DebtSnapshot.aspx?cn=NHAI-N2
Dear Shreedhar ,
Very fine to see you here. Can you give me your FB account, twitter or personal Email .
Regards,