Long term infrastructure bonds – IDFC Infrastructure Bond-Series ll

What are infrastructure bonds?

In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (“Income Tax Act”) to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor’s savings into infrastructure sector directly.

Long term infrastructure Bonds by IDFC

IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-term infrastructure bonds by IDFC in the nature of secured, redeemable, non-convertible debentures of the Company of face value of Rs. 5,000 each, having benefits under section 80 CCF of the Income Tax Act for an aggregate amount not exceeding Rs. 29,289.64 million (“Tranche 2 Bonds”) issued pursuant to the Prospectus – Tranche 2 dated January 4, 2011 (“Prospectus – Tranche 2”) (the “Issue”). These bonds have got rating of LAAA by rating agency ICRA and AAA (ind) by FITCH indicating a stable outlook.

Series 1 2
Face Value Rs 5000 per Bond
Minimum number of Bonds per application* Two Bonds and in multiples of one Bond thereafter.
For the purpose of fulfilling the requirement of minimum subscription of two Bonds, an Applicant may choose to apply for two Bonds of the same series or two Bonds across different series.
Interest payment Annual Cumulative
Interest  Rate 8.00% p.a. N.A.
Maturity Amount per Bond Rs. 5,000 Rs. 10,800
Maturity 10 years from the Deemed Date of Allotment
Yield on  Maturity 8.0% 8.0% compounded annually
Buyback Facility Yes
Yield on Buyback 8.0% 8.0% compounded annually
Buyback Date Date following 5 years and one day from the Deemed date of allotment
Buyback Amount Rs. 5,000 per Bond Rs. 10,800 per Bond
Buyback Intimation Period The period beginning not before nine months prior to the Buyback date and ending not later than  six months prior to the Buyback date

Tax adjusted yield to investors on Maturity

Investment Amount Tax Slabs  
20000   Series 1 Series 2
30.90% 13.90% 12.07%
20.60% 11.58% 10.53%
10.30% 9.65% 9.19%

Tax adjusted yield to investors on Buyback

Investment Amount Tax Slabs  
20000   Series 1 Series 2
30.90% 17.85% 16.30%
20.60% 14.00% 13.11%
10.30% 10.77% 10.38%

Invest in IDFC Bonds Today

  • The bonds don’t attract any TDS
  • The interest accrued on the Bonds will be credited to the respective bank registered with the dematerialized account through electronic clearing service (“ECS”) on the due date for interest payments or where Bonds are held in physical form, interest accrued on the Bonds will be credited to the Bondholders whose name appear in the register of Bondholder maintained with IDFC or Registrar to the Issue through cheque, demand drafts or through ECS on the due date for interest payment
  • The Bonds will be listed on NSE and BSE and can be traded after the 5 year lock-in period
  • Investors can mortgage or pledge or hypothecate or mark lien over these bonds to avail loans only after the lock-in period.
  • Investment in the Bonds can be made in dematerialized and physical forms
  • An investor would need to provide his or her PAN card to invest in these Bonds.
  • The Bonds will be issued only to resident Indian individuals (major) and HUFs
  • An applicant may subscribe to both options but the minimum application under each option shall be one Bond i.e., Rs. 5,000
  • Interest on the Bonds shall be payable on annual or cumulative basis depending on the series selected by the Bondholders
  • Issue closing date is February 04, 2011

You can also subscribe to the Bonds in physical form by following these simple steps:

  • Don’t fill up the dematerialized details in the application form
  • Compulsorily provide the following three documents with the application form:
    • Self-attested copy of the PAN card;
    • Self-attested copy of a cancelled cheque of the bank account to which the amounts pertaining to payment of refunds, interest and redemption, as applicable, should be credited.
    • Self-attested copy of the proof of residence. Any of the following documents shall be considered as a verifiable proof of residence:
      • Ration card issued by the Government of India; or
      • Valid driving license issued by any transport authority of the Republic of India; or
      • Electricity bill (not older than 3 months); or
      • Landline telephone bill (not older than 3 months); or
      • Valid passport issued by the Government of India; or
      • Voter’s Identity Card issued by the Government of India; or
      • Passbook or latest bank statement issued by a bank operating in India; or
      • Leave and license agreement or agreement for sale or rent agreement or flat maintenance bill; or
      • Letter from a recognized public authority or public servant verifying the identity and residence of the Applicant.

For more details, please see the section titled “Procedure for Application” on page 110 of the Prospectus – Tranche 2.

Investment

All investors proposing to participate in the public issue of the Long Term Infrastructure Bonds by the Infrastructure Development Finance Company Limited should invest only on the basis of information contained in the Prospectus Tranche – 2 filed with Registrar of Companies, Tamil Nadu. The Prospectus is available on the website of SEBI at www.sebi.gov.in, websites of the stock exchanges at www.bseindia.com , and www.nseindia.com  the website of the Company at www.idfc.com and the respective websites of the Lead Managers at www.kmcc.co.in, www.enam.com, www.hdfcbank.com, www.icicisecurities.com, www.jmfinancial.com and www.idfccapital.com.

To Invest in IDFC Infrastructure Bonds

    Direct No. Email
Mahendra N Shah, Company Secretary : 022-4222 2000 infrabond@idfc.com

IDFC Long Term Infrastructure Bonds are widely distributed by Banks, Brokers & Financial Planners.

Contact / Visit : Any of the nearest Lead Managers / Brokers ( listed below )

LEAD MANAGERS
Kotak Mahindra Capital Company Limited Enam Securities Private Limited
Hdfc Bank Limited ICICI Securities Limited
JM Financial Consultants Private Limited IDFC Capital Limited*
BROKERS TO THE ISSUE
Kotak Securities Limited. Enam Securities Private Limited
Sharekhan Limited JM Financial Services Private Limited
IDBI Capital Market Service Limited RR Equity Brokers (P) Limited 
SMC Global Securities Limited Bajaj Capital Limited
Almondz Global Securities Limited HDFC Securities Limited
NJ India Invest Private Limited  Integrated Securities Limited
BANKERS TO THE ISSUE 
Axis Bank Limited HDFC Bank Limited
IDBI Bank Limited Kotak Mahindra Bank Limited
ICICI Bank Limited  
INVEST ONLINE WITH  
Sharekhan Ltd ICICI Securities Ltd
HDFC Securities Ltd Kotak Securities Ltd
Reliance Money India Infoline
JM Financial Services Private Limited  

* IDFC Capital is only involved in marketing the issue.

Queries: For any Queries on IDFC Infrastructure Bonds
Email: infrabond@idfc.com
Website: www.idfc.com

Call: 022 – 4222 2000

Lead Managers: Kotak Mahindra Capital Company Limited, Tel: (91 22) 6634 1100, Fax: (91 22) 2284 0492; Enam Securities Private Limited, Tel: (91 22) 6638 1800, Fax: (91 22) 2284 6824; HDFC Bank Limited, Investment Banking Division, Tel: (91 22) 4080 4108, Fax: (91 22) 4080 4114; ICICI Securities Limited, Tel: (91 22) 2288 2460, Fax: (91 22) 2282 6580; JM Financial Consultants Private Limited, Tel: (91 22) 6630 3050 Fax: (91 22) 2204 2137; IDFC Capital Limited*; Tel: (91 22) 6622 2600, Fax: (91 22) 6622 2501.

Lead Brokers: Almondz Global Securities Limited, Tel: (91 22) 2204 5108, Fax: (91 22) 2287 0581; Bajaj Capital Limited, Tel: (91 22) 4009 9999, Fax: (91 22) 4009 9911; Enam Securities Private Limited, Tel: (91 22) 2267 7901, Fax: (91 22) 2266 5613; HDFC Securities Limited, Tel: (91 22) 3075 5346, Fax: (91 22) 3075 3435; IDBI Capital Market Services Limited, Tel: (91 22) 4322 1212, Fax: (91 22) 2285 0785; Integrated Securities Limited, Tel: (91 22) 4066 1800, Fax: (91 22) 2287 4676; JM Financial Services Private Limited, Tel: (91 22) 3021 3500, Fax: (91 22) 2266 5902; Karvy Stock Broking Limited, Tel: (91 40) 2331 2454, Fax: (91 40) 6662 1474; Kotak Securities Limited, Tel: (91 22) 6652 9191, Fax: (91 22) 6661 7041; NJ India Invest Private Limited, Tel: (91 261)- 3985 934, Fax: (91 261)- 3985 880; RR Equity Brokers Private Limited, Tel: (91 11) 2363 6362/63, Fax: (91 11) 2363 6745; Sharekhan Limited, Tel: (91 22) 6748 2000 Ext. 457, Fax: (91 22) 2498 2626; SMC Global Securities Limited, Tel: 09818620470, Fax: (91 11) 2326 3297.

Issue closes : February 04, 2011

1 comment for “Long term infrastructure bonds – IDFC Infrastructure Bond-Series ll

  1. RAVI
    February 9, 2015 at 11:15 am

    Dear Sir,
    Please let me know the buyback procedure, whether it is automatically or we have to give intimation in writing/email after completion of lock in period of 5years. W

Leave a Reply