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Friday, November 30, 2012

Fw: REC Tax Free Bonds - Issue opening on 3 Dec 2012

 

Sharekhan Mailer
RURAL ELECTRIFICATION CORPORATION LIMITED
Issue period: 3 December 2012 to 10 December 2012

Issue Highlights:

  • Issue of Tax Free Secured Redeemable Non Convertible Bonds
  • Issue Size: Rs 1,000 Crore with an option to retain oversubscription upto Rs 4,500 Crore
  • Additional Coupon Rate - Category-IV Applicants - 0.50% p.a.
  • REC is one of only 16 Indian PSUs granted "Navratna" status
  • 66.80% shareholding held by Govt. of India as on 31 Sep 2012
  • When Bonds held by the original allottees of Category IV are sold / transferred, coupon rate will be revised to the coupon rate for Category I, II & III investors. Refer to details.
  • Application cannot be made by Non-resident Indians and Foreign nationals.
Key Benefits:
  • The income from interest on these Bonds is fully exempt from Income Tax and no TDS is applicable.
  • Wealth Tax is not levied on investment in bonds under section 2(ea) of the Wealth-tax Act, 1957.
  • Credit Ratings indicating highest safety: AAA by CARE and ICRA, AAA/Stable by CRISIL.
  • The Bonds shall be listed and can be traded on BSE and NSE.
  • No upper limit on investment amount.
  • No lock in period for the Bonds.
Terms of the Issue:

ParticularsIssue Details
Face Value per Bond Rs 1,000
Tenor 10 years 15 years
Minimum Application Rs 5,000 (in multiples of Rs 1,000 thereafter)
Coupon Rate % p.a. (Category I, II and III) 7.22 7.38
Additional Coupon Rate % p.a. (Category IV) 0.50 0.50
Total Coupon Rate % p.a. (Category IV) 7.72 7.88
Effective yield % p.a. (Category I, II and III) 7.22 7.38
Effective yield % p.a. (Category IV) 7.72 7.88
Frequency of Interest payment
(Paid on 1st December)
Annual Annual
Issuance Physical and Demat mode
Interest on application % p.a. As per coupon rate applicable to investor category
Interest on refund % p.a. 5.00
Redemption Date 10 years from Deemed Date of Allotment 15 years from Deemed Date of Allotment
Redemption Amount Repayment of the face value with interest

Issue Structure:

Investor Category I - Institutional II - Non Institutional III - HNI (more than 10 lacs) IV - Retail (upto and including 10 lacs)
Issue allocation 15% 15% 40% 40%
*Basis of allotment: on first come first serve basis


* For the purpose of information only, invest only after referring to the final prospectus.
Disclaimer: Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai - 400 042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos. BSE Cash-INB011073351; F&O-INF011073351; NSE - INB/INF231073330; DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; Mutual Fund: ARN 20669; For any complaints email at igc@sharekhan.com; Disclaimer: Client should read the Risk Disclosure Document issued by SEBI, relevant exchanges and the T & C on www.sharekhan.com before investing.Sharekhan Disclaimer: Sharekhan Limited is engaged as a distributor of IPO/Bonds/NCD. Sharekhan or any of its group concerns do not in any manner recommends any product or any of its characteristics. The client is advised to take his / her own independent decisions for investing in any financial product after understanding their respective nature and risk and returns involved. The client may also approach his / her own consultants for investing in financial products or in relation to the tax related aspects. We do not solicit any action based upon this promotional material. Please note that the product does not take into account any particular investment objectives, financial decisions or needs of individual recipients. Neither Sharekhan nor any person connected with Sharekhan accepts any liability arising out of investment suggested in the material above.


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