A few people  have left comments about not being able to find the application forms of infrastructure bonds, so I was glad to see that Shiv had created a download link with both these application forms, and you can download them here conveniently.
Here is the comment that he left about it:
“As the corporate employees have been getting mails from their HR departments to submit Investment Proofs as per their Tax Declaration, I think Tax Planning season has officially kicked off from today. I’ve also been getting a large no. of calls from people for investment in Infrastructure Bonds. Many of these people are not able to get the application forms to invest in these bonds. So, I asked my associates – SBI Capital Securities to provide me an online link which I can share with my investors/clients. To help with the matters, I’m sharing this web link with all the readers of OneMint. I request you also to please check this link once & let me have your view about it.
For IDFC Infra Bonds: http://sbicapsecu.co.in/pdfstamping/PDFBondMaster.aspx?SubBrokerName=ShivKumar%C2%A0Kukreja
For L&T Infra Bonds:
http://www.sbicapsecu.co.in/pdfstamping/LNTINFRA_ShivKumarKukreja.aspx
The link takes the investors to an 8 pager application form. Investors can print the first page of the form, which is to be filled & submitted along with other relevant docs. They can also check other relevant info which is there on the ramaining pages like collection centres, Lead Managers, Lead Brokers, Financials of the Issuer, Risk Factors etc.
In case any reader has any query regarding this link (E-Form) or wants to invest in Infrastructure Bonds – IDFC or L&T, Call/SMS 1800 3454 001
On a different note, Deepak commented asking why the yield on the annual interest payment is more than the yield on the cumulative one, and I wouldn’t rely too much on those numbers because of the limitations with the way those are calculated (last year’s post).
Basically, this difference shows just in the way the the different yields are calculated in the YTM versus the CAGR method plus they don’t really account for the tax you have to pay on the interest but do include the tax benefit you gain from the investment!
If you’re interested then here is the cash flow from both methods for the 30.9% tax bracket.
|
Annual Interest Payment |
||||||
| Time Period |
Cash Flows |
|||||
|
0 |
-3455 |
0.1937 |
1.1937 |
0 |
1 |
-3455 |
|
1 |
450 |
0.1937 |
1.1937 |
1 |
1.1937 |
376.98 |
|
2 |
450 |
0.1937 |
1.1937 |
2 |
1.42491969 |
315.81 |
|
3 |
450 |
0.1937 |
1.1937 |
3 |
1.700926634 |
264.56 |
|
4 |
450 |
0.1937 |
1.1937 |
4 |
2.030396123 |
221.63 |
|
5 |
5450 |
0.1937 |
1.1937 |
5 |
2.423683852 |
2248.64 |
| Â YTM |
19.137% |
Total Cash Flow |
-27.37717 |
|||
| Cash Outflow |
3455 |
|||||
| Cash Inflow |
7250 |
|||||
| Difference |
3795 |
|||||
|
Cumulative Payment |
|||
|
0 |
3455 |
0.1737 |
600.1335 |
|
1 |
4055 |
0.1737 |
704.3767 |
|
2 |
4760 |
0.1737 |
826.7269 |
|
3 |
5586 |
0.1737 |
970.3294 |
|
4 |
6557 |
0.1737 |
1138.876 |
|
5 |
7695 |
||
| Yield |
17.37% |
||
| Cash Outflow |
3455 |
||
| Cash Inflow |
7695 |
||
| Difference |
4240 |
||
As you can see the yield is higher in the first option but the absolute difference in cash is more in the second option. If you’re not sure of how I arrived at these numbers then go through last year’s post on how issuers were calculating effective yields for tax saving infrastructure bonds.
are there any infrastructure bonds to save the tax over if I am in 30% slab. also inform about other tax saving schemes.
sir pl let me know the current value of IDFC bond SF 4 BD 12NV20 today. or send me the link to track. I purchased long back for tax saving.
also suggest some areas to invest some 2 to 3 lacks
Dear Sir,
Please inform me whenever any store related works in your esteem concern for TL.
Regards,
Hitlar Kalita
Ph-9706115965
Hi Manshu… SBI Cap Securities is facing some technical issues while readers are hitting on the older links to download IDFC and L&T Infra Bond forms. Can you please replace the older links with the below pasted newer links ?
http://www.sbicapsecu.co.in/pdfstamping/IDFCBOND_Kukreja.aspx
http://www.sbicapsecu.co.in/pdfstamping/LNTINFRA_ShivKumarKukreja.aspx
No problem – I’ve updated the links.
Hi Manshu… Can you please replace the older IDFC link with the below pasted link?
http://sbicapsecu.co.in/pdfstamping/PDFBondMaster.aspx?SubBrokerName=ShivKumar Kukreja
I hope this is the last time I’m giving you this pain… 🙂
No worries, this is very easy for me to do so let me know when it gets expired next.
Please paste this link:
http://sbicapsecu.co.in/pdfstamping/PDFBondMaster.aspx?SubBrokerName=ShivKumar%C2%A0Kukreja
Nice bond. I would like to know more about it and also like to invest in it.
Please let me know the procedure to invest online and offline.
Hi.. Online possible only through Demat account and if your broker is providing the facility.
Offline – Just fill the application form, attach the KYC documents (self-attested PAN card copy, self-attested address proof copy & self-attested cancelled cheque) and an investment cheque along and deposit all these at the designated bank branch in your city.
Hi Manshu.. Can you please replace the old links with these new ones as I think the limit of 500 forms each has got exhausted?
http://www.sbicapsecu.co.in/pdfstamping/IDFCBOND_KUKREJA1.aspx
http://www.sbicapsecu.co.in/pdfstamping/lntinfra_kukreja1.aspx
wow!
Done thanks!
How many people will apply for IFCI and how many people will apply for IDFC or L&T will become clear once the final collection figures come. Let us wait for that.
LIC, Indian Railways, Oil Cos., Power Sector Cos. etc. are all monopolies and completely backed by the Govt., even if running in losses. MTNL was a profit making co. when Airtel and Hutch entered the market. Look at its condition now. I’m sure it is a liability for the Govt. at present.
Do you think the politicians are taking any paycuts to let you & me travel at one rupee every ten KMs. Boss it is all taxpayers’ money & nothing else. How much these Govt. babus make behind Free Passes, Free School Lunches, Free this, Free that, NREGA, MNREGA etc. is a known thing to everybody. I think not even 5% of the total allocated money for all these schemes reach for the actual causes. I think even 5% would be a very high % I’m quoting here. So if you say Govt. is the cleanest & most efficient of all, I completely disagree with you.
even if various fine print points are against ifci, people will just apply for them- incl me- as there is hidden surety from central govt. and various government comp are great and taking care of common citizens of india. shining examples are lic of india, the railways, oil companies, power sector companies and many more. which private company will let any citizen travel for one rupee every ten km? free pass for girl students? to take up ex about how no of so called good private comp go even worrst when their interests at stake- look at idfc postal ballot form of november where the vote was clearly visible even after sealing the inland form. many investors complained to idfc still they continued. . such open chori and sinazori by idfcd makes no room to consider it superior over ifci.
Well common people like me look no beyond if the company is directly or indirectly controlled by central govt. and a bit higher interest is an added attraction for ifci. i still remember us64 uti n its rescue by central govt.
Oh! So you weren’t joking! Sorry Shiv!
The difference between the workings of IFCI as against IDFC or L&T is quite similar to the workings of erstwhile UTI Mutual Fund as against HDFC Mutual Fund or Franklin Templeton Mutual Fund. Erstwhile UTI Mutual Fund was completely under the umbrella of Govt. at the time it went burst, whereas the likes of HDFC Mutual Fund or Franklin Mutual Fund continued growing and making money for the investors.
Look at the difference between MTNL or BSNL vis a vis Bharti Airtel or Vodafone. MTNL or BSNL have continously performed poorly as against Airtel or Vodafone. Govt. managements havent been able to produce cos. like Infosys or TCS or HDFCs or Kotaks of the world. Govt. keeps subsidising cos. like BPCL or IOC or ONGC from the huge taxes paid by you & me but has never been able to solve the basic pricing problems of the Oil & Gas sector as a whole. They havent been able to produce cos. like Cairn India or ArcelorMittal or Infosys or Wipro.
Nobody is unaware of the workings in the Govt. departments. Look at the kind of valuations that markets give to the likes of SBI or other Govt. run banks as against HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank or Yes Bank. I think it is less than half of the valuations attracted by the private banks. The stock price of SBI has fallen more than 50% in the recent period just because of the NPA problems. SKS Microfinance stock price has fallen from Rs. 1,300 to less than Rs. 100 just because of one Andhra Pradesh Govt. order.
But the Govt. is sitting pretty, lowering the GDP growth targets and trying to convince people that one bright day, the Inflation will fall and Fiscal Deficit will be in control. Politicians are there just to beg your votes and do nothing after coming to power. Time to wake up Mr. Prime Minister and do something for the country. To conclude, US-64 was rescued from the taxpayers’ money only, no minister took a salary cut to rescue it Mr. Sahil.
Shiv – Since this is a debt instrument coming from the Govt. it just makes the product more attractive (and safe). Whether the company grows at 20+% like IDCF/ L&T or not we are not going to participate in the growth of the firm by buying these bonds. So IFCI is a better bet in my humble opinion.
If your argument is to buy ownership (stock) in IFCI vs IDFC most private enterprises will win hands down. But for Bonds – Govt sponsored bonds win!
Hi justgrowmoney
First of all, these are neither “Govt sponsored bonds” nor they are coming from the Govt. Had it been the case, the ratings would not have been required. These are “unsecured bonds” and the ratings assigned to these bonds clearly suggest that. Secondly, IFCI is neither directly controlled by the Govt. nor it will get a majority control once the debt is converted into equity. Yes, the indirect controlling stake is there and that gives a lot of confidence to me also, but when it comes to choosing among the three cos. – IDFC, L&T & IFCI, I would definitely go for IDFC. Whether you are routing through equity or debt, you are inveting your money in the future performance of that company.
Govt. and DIIs have a large stake in IDFC also. Moreover, the active management of IDFC, secured nature of these bonds and the ratings assigned to the issue gives me enough confidence to go for IDFC. These are my personal opinions and I’m not against investing in IFCI bonds. The main purpose to invest in these bonds is to save tax and with more than 99.99% probability, all these Infra Bonds are safe.
Coming from the government? That makes no sense at all as Shiv pointed out.
At the current yields and tax savings the Infra bonds beat other debt instruments (sans EPF/PPF) so is a good addition to anyone’s debt portfolio, IMO.
Dear manshu, shiv, ifci is out with better infra bonds since nov 30. now forget idfc and l and t
Hi Sahil
I dont know on what basis you consider these bonds to be better than IDFC bonds or L&T bonds. There are several parameters on which an Infra Bond issue is to be measured/considered. IFCI issue is a private placement and offering unsecured bonds whereas IDFC and L&T, both are secured ones.
IFCI issue is rated ‘BWR AA-‘ by Brickwork Ratings, ‘A+’ by CARE Ratings & ‘LA’ by ICRA. ICRA is the common rating agency in all the three issues, IDFC, L&T and IFCI. ICRA has assigned ‘AAA’ to the IDFC issue, ‘AA+’ to the L&T issue and ‘LA’ to the IFCI issue, which shows ratings-wise, IFCI issue is quite inferior to the other issues.
Also, though IFCI has an indirect Govt. backing, its a financially weak institution as compared to IDFC and L&T. The only thing which makes IFCI issue to be better than the other issues is the interest rates on offer i.e. 9.09% as compared to 9% IDFC & L&T offerings. The difference of only Rs. 18 p.a. and Rs. 90 in the next five years, I would definitely opt for IDFC or L&T for my Tax Saving investments rather than IFCI.
I dont have anything personal against IFCI and also IDFC and L&T are not paying me anything to write in their favour, these are just my personal views about the issues on offer. 🙂
I think he just meant it in humor and and a bit sarcastically that hey look at this .09% extra they’re giving 🙂
oh ok, sorry Sahil… I think I’ve lost my sense of humour and understanding others’ also.
🙂
Its a nice bit of information Manshu. IDFC would be a better choice compared to L&T because of the credit rating.
As investment in infra. bonds is excluded from tax and is after 80C limit, I hope almost most of them would go for this. Also, proofs are to be submitted during the month of January/March for salaried employees.
Can you also comment on the taxation of the interest earned from these bonds? Will this be added to our income at the maturity?
No, I don’t agree with that – just going by the credit rating is not enough – you can’t say anything definitively by that.
Yeah, the interest will be taxed the way interest from FD is taxed – not capital gains or anything.
By the way manshu, which option is better? we can’t go in absolute cash and other technical points but need simple answer guiding us to better choice.
Split half and be done with it Sahil.
Investors in Mumbai may contact us for Infrastructure bonds applications.
We will arrange to courier forms on a priority basis.
Call Furqan @ 9322763744 / 28131333 / 65046523
Investors in Mumbai may contact us for Infrastructure bonds application. We will arrange to courier of forms on a priority basis. Call Furqan @ 9322763744