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Friday, November 30, 2012
REC Tax Free Bonds - Dec 2012
Issue period: 3 December 2012 to 10 December 2012
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Issue Highlights:
- Issue of Tax Free Secured Redeemable Non Convertible Bonds
- Issue Size: Rs 1,000 Crore with an option to retain oversubscription upto Rs 4,500 Crore
- Additional Coupon Rate - Category-IV Applicants - 0.50% p.a.
- REC is one of only 16 Indian PSUs granted "Navratna" status
- 66.80% shareholding held by Govt. of India as on 31 Sep 2012
- When Bonds held by the original allottees of Category IV are sold / transferred, coupon rate will be revised to the coupon rate for Category I, II & III investors. Refer to details.
- Application cannot be made by Non-resident Indians and Foreign nationals.
Key Benefits:
- The income from interest on these Bonds is fully exempt from Income Tax and no TDS is applicable.
- Wealth Tax is not levied on investment in bonds under section 2(ea) of the Wealth-tax Act, 1957.
- Credit Ratings indicating highest safety: AAA by CARE and ICRA, AAA/Stable by CRISIL.
- The Bonds shall be listed and can be traded on BSE and NSE.
- No upper limit on investment amount.
- No lock in period for the Bonds.
Terms of the Issue:
Particulars
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Issue Details
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Face Value per Bond
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Rs 1,000
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Tenor
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10 years
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15 years
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Minimum Application
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Rs 5,000 (in multiples of Rs 1,000 thereafter)
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Coupon Rate % p.a. (Category I, II and III)
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7.22
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7.38
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Additional Coupon Rate % p.a. (Category IV)
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0.50
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0.50
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Total Coupon Rate % p.a. (Category IV)
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7.72
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7.88
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Effective yield % p.a. (Category I, II and III)
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7.22
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7.38
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Effective yield % p.a. (Category IV)
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7.72
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7.88
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Frequency of Interest payment
(Paid on 1st December) |
Annual
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Annual
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Issuance
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Physical and Demat mode
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Interest on application % p.a.
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As per coupon rate applicable to investor category
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Interest on refund % p.a.
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5.00
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Redemption Date
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10 years from Deemed Date of Allotment
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15 years from Deemed Date of Allotment
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Redemption Amount
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Repayment of the face value with interest
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Issue Structure:
Investor Category
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I - Institutional
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II - Non Institutional
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III - HNI (more than 10 lacs)
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IV - Retail (upto and including 10 lacs)
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Issue allocation
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15%
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15%
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40%
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40%
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*Basis of allotment: on first come first serve basis
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Daily News Roundup - Nov 30 2012
Hero MotoCorp Ltd reported retail sales of over 1.1mn units in October and November. (BL) NTPC said the first unit of 500 MW of the Vallur Thermal Power Project set up by NTPC Tamil Nadu Energy Co Ltd has started operations. (BL) The Supreme Court directed the Central Bureau of Investigation to "take action in the matter of prosecution" of the telecom companies and public servants mentioned in its report, prepared by A P Singh. The companies involved in the proceedings before the court were Bharti Airtel and Vodafone India. (BS)
Noteworthy November series: Sensex, Nifty skyrocket
What a fantastic finish to the November F&O series. It was a day where long rollovers in the high beta sectors like Real Estate, Infra and Auto and the defensive Pharma stocks lifted the markets to hit the highest level in the calendar year 2012. While, some heavy short covering in the Banking sector towards the fag end of the session saw the NSE Nifty close above the 5800 mark for the first time in the year 2012. Even the Sensex breached the 19,000 levels for the first time in nearly two-months on expectations that the government would be able to push through economic reforms. Adding to the bullish flavor, credit rating agency Moody’s on Tuesday said the outlook on India rating was stable. Moody's said the stable outlook on the country's Baa3 rating was based on its structural strengths of a high household savings rate and relatively competitive private sector, which could help raise growth in coming years. Finally, the BSE Sensex closed at 19170, surging 328 points over the previous close. It had earlier touched a day's high of 19205 and a day's low of 18873. It opened at 18873. The NSE Nifty was quoting at 5,825, up 98 points over the previous close. It earlier touched a day’s high of 5,833 and a day’s low of 5736. It opened at 5,736. RIL, TCS, Wipro, ICICI Bank, Bajaj Auto, Tata Motors, ITC, Bharti Airtel, SBI, L&T, Ranbaxy, Tata Power, NTPC, Dr Reddy’s Lab, HDFC, Coal India, L&T, are among gainers in Sensex and Nifty. Infosys, BHEL, NTPC, Maruti Suzuki, Hero MotoCorp, Siemens, Power Grid, HCL Tech, are among losers in Sensex and Nifty. The INDIA VIX on NSE surged 10% to end at 15.37. It hit a day’s high of 15.62 and a day’s low of 13.48. Today’s noteworthy rally was seen on the back of life time high turnover over 3.92 lakh crores turnover was registered on the bourses. For the Series, the NSE Nifty and the BSE Sensex ended higher by 2.1% each.
December delight is here
To overcome difficulties is to experience the full delight of existence - Arthur Schopenhauer The market seems keen on repeating the historic trend of December being a delightful month as it has for most years in the last two decades. The Nifty has managed to overcome the 5800 hurdle for now thanks to a bout of short covering and renewed buying interest. The outlook remains optimistic at start with global cues mostly pointing upwards. The rally could well continue if the government manages to get its act together on crucial pending bills. For the day, investors will closely keep an eye on the GDP data for the quarter ended September 30. Other data expected include fiscal deficit numbers and possibly the growth figures of Eight Infrastructure industries.
Bullions back to gains
Yellow metal rises for first time in four days Bullion metals ended substantially moderately higher at Comex on Thursday, 29 November 2012. Gold prices ended higher for first time in four days. The key outside markets were also bullish for the precious metals on Thursday, as the U.S. dollar index was weaker and crude oil prices were higher. Gold for December delivery rose $10.7 (0.6%) to settle at $1,727.2 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. On Thursday, March silver rose 66 cents, or 2%, to settle at $34.43 an ounce.
Market may extend recent gains on firm Asian stocks
The market may extend recent gains on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 21.50 points at the opening bell. Asian stocks rose Friday, as Japan's cabinet approved a second economic stimulus package and its industrial production unexpectedly increased in October
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