IFAs can recommend “REC Long Term Infrastructure Bond-Series (2011-12)” to those clients who are looking for tax benefits and extra income but one must remember that these bonds are unsecured.
REC Long Term Infrastructure Bond-Series (2011-12) will be open till 10th February 2012. 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 one bond and multiples of one bond thereafter. Each bond has a face value of Rs. 5,000 per bond.
Availability: In dematerialized form and in physical form.
Who can sell the product?
· Registered stock-brokers with any Stock Exchange along with their respective sub-broker
· Banks and brokers selected by the issuing company
How can an IFA get registered to sell the product?
· An IFA who wishes to sell the product needs to sign the sub-broker agreement with a stock-broker.
Tentative Brokerage structure:
On the allotment amount a minimum brokerage of 1% is offered upfront. Also, a minimum of Rs. 100 is offered per application.
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Options for Subscription |
I |
II |
III |
IV |
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Frequency of Interest Payment |
Cumulative |
Annual |
Cumulative |
Annual |
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Coupon (% p.a.) |
8.95% (compounded annually) |
8.95% (payable annually) |
9.15% (compounded annually) |
9.15% (payable annually) |
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Buyback option |
Yes |
Yes |
Yes |
Yes |
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Interest Payment Date |
At the time of maturity |
15th February every year |
At the time of maturity |
15th February every year |
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Tenor |
10 years |
10 years |
15 years |
15 years |
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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. |
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Lock-in Period |
Five years from the Deemed Date of Allotment |
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Maturity Date |
15 February 2022 |
15 February 2022 |
15 February 2027 |
15 February 2027 |
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Buyback Amt. after 5 yrs + 1 day |
Rs.7677/- |
Rs.5000/- |
Not Applicable |
Not Applicable |
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Buyback Amt. after 7 yrs + 1 day |
Not Applicable |
Not Applicable |
Rs.9231/- |
Rs.5000/- |
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Face Value & Issue Price
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