If you missed NTPC, gear up for PFC tax free bonds
Written on Friday, September 25, 2015
By Kumar Pushpraj
National Thermal Power Corporation (NTPC) opened its public issue on 23rd Sep and has already been oversubscribed by 6 times. If you have missed it, here is another golden opportunity for you as Power Finance Corporation (PFC) has announced its issue opening date and would be raising a total of 700 Crores. The issue would be opening on 5th October and is scheduled for closure on 9th October but looking at the response of NTPC bonds, this too would get over subscribed the same day or may be within hours. Allotment will be done on the first come, first serve basis.
Face value of these bonds would be Rs. 1000/bond and minimum application has to be 5 bonds (Rs. 5000) either individually or collectively across all series of bonds and in multiple of one bond (Rs. 1000) thereafter. These bonds are proposed to be listed on BSE which makes them an attractive investment option. Like NTPC, PFC would most likely issue the bonds in demat form. As they have been rated AAA by the rating agencies such as ICRA, CRISIL and CARE, trust factor is high. There are close to no risk with investment as PFC is a government entity and hence, your investment is at utmost safety.
Interest Rates for PFC Bonds
Retail investors investing up to 10 lakhs can earn 7.36% (10 Years), 7.52% (15 Years) and 7.60% (20 Years). Same interest rate would apply for HUFs and NRIs.
If your investment is more than 10 lakhs you can earn 7.11 (10 Years), 7.27% (15 Years) and 7.35% (20 Years). This matrix is for HNIs, HUFs, NRIs, Non-Individuals and Corporates.
Category Wise Allocation
These bonds are completely tax free but capital gains made on selling of tax-free bonds on stock exchanges are taxed at 10%.
to find out more information on PFC bonds and to know about application procedure.