IFAs can recommend “L&T Long Term Infrastructure Bonds - Tranche I” to those clients who are looking to create secured income with added tax benefits
L&T Long Term Infrastructure Bonds - Tranche I will be open from November 25 till December 24. Bondholders can avail the additional Rs 20,000 deduction under section 80CCF of the Income-tax Act (apart from the Rs one lakh deduction under section 80C).
Who can Apply: Resident Indian Individuals (Minors not eligible) and HUFs
Application Size: Minimum of five Tranche I bond and multiples of one Tranche I bond thereafter. Each bond has a face value of Rs. 1,000.
Availability: In dematerialized form and in physical form on request only
Who can sell the product?
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Registered stock-brokers with any Stock Exchange along with their respective sub-broker
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Banks and brokers selected by the issuing company
How can an IFA get registered to sell the product?
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An IFA who wishes to sell the product needs to sign a sub-broker agreement with a stock-broker.
Tentative Brokerage structure:
On the allotment amount a brokerage of 1% is offered upfront. Also, Rs. 100 is offered per application.
Bond Features
|
Options for Subscription |
I |
II |
|
Frequency of Interest Payment |
Annual |
Cumulative |
|
Yield on Maturity |
9% |
9% (Compounded Annually) |
|
Buyback option |
Yes |
Yes |
|
Buyback Dates |
First working day after the expiry of 5 years from the Deemed Date of Allotment and the first Working Day after the expiry of 7 years from the Deemed Date of Allotment. | |
|
Lock-in Period |
Five years from the Deemed Date of Allotment | |
|
Maturity Date |
10 years from the Deemed Date of Allotment | |
|
Face Value & Issue Price |
Rs 1000 per bond | |
|
Minimum Application |
5 Tranche 1 Bonds and in multiples of 1 Tranche 1 Bond thereafter. | |
|
Tax Benefit |
Avail the additional Rs 20,000 deduction under section 80CCF of the Income-tax Act (apart from the Rs one lakh deduction under section 80C) | |
|
Buyback Amount |
Rs. 1,000 at the end of 5 years / Rs. 1,000 at the end of 7 years |
Rs. 1,538.62 at the end of 5 years / Rs. 1,828.04 at the end of 7 years |
|
Maturity Amount |
Rs. 1,000 per Tranche 1 Bond |
Rs. 2,367.36 per Tranche 1 Bond |
|
Nature of the Bond |
Secured | |
|
Security Cover |
1.0 time the outstanding Tranche I Bonds at any point of time. | |
|
Credit Rating |
Assigned ‘CARE AA+’ by CARE and ‘[ICRA] AA+’ by ICRA | |
|
Issuance & Trading |
Bonds will be primarily issued in dematerialized form and also in physical form on request only. However, trading will be allowed only in dematerialized mode after the expiry of lock-in period of 5 years | |
Registrars: Sharepro Services (India) Private Limited
Depositories: NSDL and CDSL
Listing: Bonds to be listed on BSE
Lead Brokers: Almondz Global Securities, Bajaj Capital Investor Services, Eastern Financiers, Enam Securities, HDFC Securities, ICICI Securities, IDBI Capital Market Services, IFCI Financial, Integrated Enterprises, JM Financial Services, Karvy Stock Broking, Kotak Securities, NJ India Invest, RR Equity Brokers, SBICAP Securities, SMC Global Securities, SHCIL Services, Sharekhan, Standard Chartered Securities.
