Fw: PFC Tax-free Bond Issue - Opening on 30 Dec 2011

 

 

Power Finance Corporation Issue of tax-free secured redeemable non-convertible bonds in the nature of debentures Issue period: Friday, December 30, 2011 to Monday, January 16, 2012 Basis of allotment: On a first-come-first-serve basis within each category Issue size: Rs1,000 crore with an option to retain an oversubscription up to the shelf limit of Rs4,033.13 crore) Investment Opportunity: Interest rates are at peak level; best time to invest in fixed income tax free instruments. Interest rate cycle has peaked out Given the sharp slowdown in the industrial activity and softening of the food inflation, the interest rate cycle has peaked out. Reserve Bank of India has restrained from increasing the interest rates in the last policy review meet and is expected to begin reducing rates in March or April 2012. The bond yields which have increased close to 9% levels have corrected significantly and show easing of pressure on rates. High post tax yield for triple A rated product Tax free bond with yield of 8.2-8.3% is comparable with yields offered on government bonds and offer extremely attractive pre-tax yield close to 12% for a long period of time. The bond issue has got AAA (stable) rating from the rating agencies -- Crisil and CARE. The bonds would also be listed and tradable on NSE/BSE. About Power Finance Corporation: Power Finance Corporation-A Navratna Government of India undertaking (GoI; 73.72% equity stake held by GoI) Set up in July 1986 as a specialised financial institution dedicated to power sector financing and committed to the integrated development of the power and associated sectors Classified as infrastructure finance company in July 2010 by the Reserve Bank of India and as a public financial institution u/s 4A of the Companies Act ,1956 Options/Series Tranche-1 Series I Tranche-1 Series II Face value per bond Rs1,000 Rs1,000 Minimum application size Rs10,000 (10 bonds) Rs10,000 (10 bonds) In Multiples Of Rs5,000 (5 bonds) Rs5,000 (5 bonds) Frequency of interest payment Payable annually Payable annually Interest rate pa (%) 8.20% 8.30% Interest payment date Every year on October 15 and on respective maturity Redemption/Maturity date 10 years 15 years Redemption amount Repayment of the face value plus any interest that may have accrued on the redemption date Repayment of the face value plus any interest that may have accrued on the redemption date Category I II(Above Rs5 lakh) III (Below and including Rs5 lakh) Portion Institutional portion HNI portion Retail portion Size in % 50% of overall issue size on first-come-first-serve basis 25% of overall issue size on first-come-first-serve basis 25% of overall issue size on first-come-first-serve basis

Sharekhan Ltd: BSE Cash-INB/ INF 011073351; NSE - INB/INF /INE 231073330; MCX-SX INE 261073330 DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; PMS INP000000662. Sharekhan Commodities Pvt. Ltd.: MCX-10080; NCDEX-00132; Regd/Admin Add:- Lodha iThink Techno Campus, 10th Floor, Beta Building, Off. JVLR, Opp. Kanjurmarg Station, Kanjurmarg (East), Mumbai 400 042, Maharashtra. for any complaints email at igc@sharekhan.com; Regd/Admin Add:- Lodha iThink Techno Campus, 10th Floor, Beta Building, Off. JVLR, Opp. Kanjurmarg Station, Kanjurmarg (East), Mumbai 400 042, Maharashtra. for any complaints email at igc@sharekhan.com. Disclaimer: Sharekhan Limited is engaged as a distributor for distribution 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.