IFAs can recommend PFC
bonds to investors looking for steady income with tax advantages and safety of
capital.
PFC
Long-term Infrastructure Bonds and IFCI Long Term Infrastructure Bonds–SERIES
III will be open till 4 November and 14 November respectively. 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 in the individual
name of the Karta
Application Size:
Minimum of one bond and multiples of one bond thereafter. Each bond has a face
value of Rs. 5000.
Availability: In
dematerialized form or in physical form
Bond Features
|
Options for Subscription |
I |
II |
III |
IV |
|
|
Frequency of Interest Payment |
Cumulative |
Annual |
Cumulative |
Annual |
|
|
Interest Rate (% p.a.) |
8.50 % p.a. (Annual compounding) |
8.50 % p.a. |
8.75 % p.a. (Annual compounding) |
8.75% p.a. |
|
|
Tenor |
10 years |
10 years |
15 years |
15 years |
|
|
Buyback option |
Yes |
Yes |
Yes |
Yes |
|
|
PFC Buyback Dates |
At the end of 5th year from Deemed
Date of Allotment |
At the end of 7th year from Deemed
Date of Allotment |
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|
IFCI Buyback Dates |
At the end of 5th and 7th years
from Deemed Date of Allotment |
At the end of 7th, 10th and 12th
year from Deemed date of Allotment |
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|
Lock-in Period |
Five years from the Deemed Date of
Allotment |
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|
Min Investment & Face Value |
Rs
5000 per bond |
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|
Investment in Multiples of |
Rs
5000 per bond |
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|
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) |
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|
Nature of the Bond |
PFC Infra Bond: Secured |
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|
IFCI Infra Bond: Unsecured |
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|
Credit Rating |
PFC Infra Bond: Assigned “AAA/Stable” by Crisil and “AAA” with a stable outlook
by ICRA |
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|
IFCI Infra Bond: Assigned “BWR AA-” by Brickwork Ratings (India), “CARE A+” by
CARE and “LA” by ICRA |
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|
Issuance & Trading |
Bonds shall be issued both in
dematerialized form and physical form. However, trading allowed only in
dematerialized mode after the expiry of lock-in period of 5 years |
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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?
· If an IFA wishes to sell the product
he needs to sign the sub-broker agreement with a stock-broker.
Tentative Brokerage structure:
|
No of Applications |
Brokerage (%) |
|
< 1000 |
1% |
|
1000 - 5000 |
1.10% |
|
5000 - 10000 |
1.20% |
|
10000 - 20000 |
1.30% |
|
> 20000 |
1.50% |
|
Note: Base brokerage is 1% |
|
