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IRFC Ltd Tax Free Bonds issue Dec 2015

Published on Thursday, December 3, 2015 by Dilip Davda

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IRFC Ltd Tax Free Bonds issue Dec 2015

Indian Railway Finance Corp Ltd (IRFC) is coming out with its tax free, Secured, Redeemable, NON-CONVERTIBLE BONDS OF FACE VALUE OF Rs. 1,000 EACH IN THE NATURE OF DEBENTURES HAVING TAX BENEFITS UNDER SECTION 10(15)(iv)(h) OF THE INCOME TAX ACT, 1961, AS AMENDED, ("BONDS") FOR AN AMOUNT OF Rs. 1000 crore ("BASE ISSUE SIZE") WITH AN OPTION TO RETAIN OVERSUBSCRIPTION UPTO Rs. 3532 crore AGGREGATING TO Rs. 4532 crore ("TRANCHE – I ISSUE").

IRFC is infrastructure finance company having tie up with Ministry of Railways for supplying rolling stock on lease. To meet is part funding requirements; the company is coming out with its 6th tax free bonds issue.

Minimum application is to be made for 5 bonds and in multiple of 1 bond thereon, thereafter. The company will be paying interest of 5% on refund money for the issue. Bonds are available in demat as well as in physical mode, however, trading will take place only in demat mode. Lead managers to this offer are SBI Capital Markets Limited, A.K. Capital Services Limited, ICICI Securities Limited, Edelweiss Financial Services Limited and RR Investors Capital Services Private Limited. The debenture trustee for the Issue is SBICAP Trustee Company Limited. Karvy Computershare Pvt Ltd is the registrar to the issue. These bonds are available for a tenure of 10 yrs, 15 yrs and 20 yrs and the coupon rates are at 7.07%, 7.28% and 7.25% for the respective tenures for non-retail category I,II and III while retail category is being offered interest rates at 7.32%, 7.53% and 7.50% for the said periods. Post allotment, these bonds will be listed on BSE, NSE.

This bond offer is graded as CRISIL AAA/Stable, ICRA AAA and CARE AAA by respective credit rating agencies. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. Issue opens for subscription on 08.12.15 and will close on or before 21.12.15. Funds mobilized by this issue will be used towards financing the acquisition of rolling stock which will be leased to Ministry of Railways in line with the present business activities. Allocation ratio of this issue is 15% for QIBs, 20% for Corporate, 25% for HNIs and the rest (i.e. 40%) for retail.

On performance front, this company has been recording an EPS of Rs. 200 plus for last five fiscals and is having strong financial records.

Conclusion: As the interest rates are set to cool down going forward, this offer with above 7% tax free returns for longer tenure worth considering.

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


10 Comments

MANOJ
10. MANOJ  Dec 23, 2015 13:22 I Like It. | I Don't Like It. | Report Abuse Reply
WHAT IS THE LISTING DATE OF IRF TAX FREE BONDS
MUKESH
10.1. MUKESH  Dec 24, 2015 11:12 I Like It. | I Don't Like It. | Report Abuse
LISTING ON MONDAY
manoj
10.2. manoj  Dec 24, 2015 13:02 I Like It. | I Don't Like It. | Report Abuse
what is expected listing price of 7.53% IRFC 2030 Bond
NIRMAL
9. NIRMAL  Dec 22, 2015 05:53 I Like It. | I Don't Like It. | Report Abuse Reply
karvy sent sms about allotement
Anand
8. Anand  Dec 21, 2015 21:05 I Like It. | I Don't Like It. | Report Abuse Reply
Any Nsdl ac holder, got intimation??

I havent got yet
Smita
7. Smita  Dec 21, 2015 13:45 I Like It. | I Don't Like It. | Report Abuse Reply
Applied under Retail for 1000 & got 791
manoj
7.1. manoj  Dec 21, 2015 14:36 I Like It. | I Don't Like It. | Report Abuse
which site you have checked the same
NIRMAL
6. NIRMAL  Dec 21, 2015 10:22 I Like It. | I Don't Like It. | Report Abuse Reply
RETAIL CAT. ALLOTEMENT IS 79.56 %
MANOJ
6.1. MANOJ  Dec 21, 2015 12:06 I Like It. | I Don't Like It. | Report Abuse
HOW YOU GOT THIS DATA
rohit
5. rohit  Dec 20, 2015 10:48 I Like It. | I Don't Like It. | Report Abuse Reply
Any update on allotment and listing date and price?
Anand
4. Anand  Dec 10, 2015 22:16 I Like It. | I Don't Like It. | Report Abuse Reply
Almost 74% allotment !! Enjoy !!
Ankur
4.1. Ankur  Dec 11, 2015 14:40 I Like It. | I Don't Like It. | Report Abuse
On which date it will be listing??
DINESH
3. DINESH  Dec 8, 2015 11:47 I Like It. | I Don't Like It. | Report Abuse Reply
TAX FREE RATE TODAY CLOSE 08-12-2015 RETAIL INVESTMENT 10 LAKHA PER APLICATION AND 10 LKHA APP BYER 25000 RS SO PLEASE INVEST IT SHARE
DINESH
2. DINESH  Dec 8, 2015 11:45 I Like It. | I Don't Like It. | Report Abuse Reply
BEST INVESTMENT FOR INVESTER 100000 RS BYER 2500 RS IN MARKET
Bijay Kumar Tantia
1. Bijay Kumar Tantia  Dec 7, 2015 17:59 I Like It. | I Don't Like It. | Report Abuse Reply
Since No cumulative maturity on long term is offered,it is better to invest in Post office.


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