Product Note-REC Tax Free Bond Issue dt 3 Dec to 10 Dec 2012

 

Rural Electrification Corporation (REC) has launched its Tax Free Bonds issue of Rs.1000 Cr with right to retain over Subscription upto 4500 Cr.

Product Note

Issue Details

Issue Opens

Monday, December 03, 2012

Issue Closes

Monday, December 10, 2012*

Issuer

Rural Electrification Corporation Limited

Issue Size

Public Issue of Rs. 1000 crores with right to retain over subscription up to the Shelf Limit (i.e. up to Rs 4,500 crores)

Minimum Application Size

Face value of each Bond shall be Rs. 1,000/- and the minimum application size shall be for 5 bonds and in multiples of 1 Bond thereafter

Listing

BSE and NSE

Rating

“CRISIL AAA/Stable” by CRISIL,

“CARE AAA” by CARE, “IND AAA” by IRRPL

“[ICRA]AAA” by ICRA

Coupon Rates for Category-I, II, III & IV Applicants (% p.a)

7.22%

7.38%

Additional Coupon Rates for Category-IV Applicants (% p.a.)**

0.50%

0.50%

Aggregate Coupon Rates for Category-IV Applicants (% p.a.)**

7.72%

7.88%

Interest payment date

December 01, of every year.

Tenor

10 years

15 years

Face Value per Bond

Rs. 1,000/-

Frequency of Interest payment

Annual

Annual

Registrar

Karvy Computershare Private Limited
Mode of allotment

In dematerialised form as well as in physical form, at the option of Applicants.

  • Allotment First Come First Basis
  • Cheque in favor of  - “REC Tax Free Bond 2012-13 Escrow Account Tranche I ” and Cross Payee

 

Document Required for Physical Mode 

  •  Self attested copy of Pan Card
  • Self attested copy of Address Proof (Valid)
  • Self attested copy cancelled Cheque of the bank account to which the amount pertaining to payment of refunds, Interest and Redemption , as applicable, should be credited.

About Issue

About the Issuer

  • Notified as a Public Financial Institution under Section 4A of the Companies Act, 1956
  • REC is one of only 16 Indian public sector undertakings to be granted “Navratna” status by the Department of Public Enterprise by virtue of its operational efficiency and financial strength.
  • 66.80% shareholding in REC is held by Government of India acting through Ministry of Power. GoI has rated RECs performance as “Excellent” continuously since Fiscal 1994.
  • Credit Ratings indicating highest safety:
    • CRISIL AAA/Stable” by CRISIL, “
    • CARE AAA” by CARE,
    • INDAAA” by IRRPL  and
    • [ICRA] AAA” by ICRA.

Issue Highlight

  •  The Income by way of Interest on these Bonds is fully exempt from Income Tax as per provision under section 10(15) (iv) (h) of IT act.
  • No TDS
  • Capital Gain Benefit – capital gain arising on the transfer of listed bonds shall be taxed @ 10% without Indexation or @20% with Indexation.

Benefit to Investor

  • Retail Investor Limit 10 lakhs
  • No TDS on Interest
  • Income by way of Interest on these bonds is fully exampted from Income Tax
  • D’mat & Physical Mode

 

Subscription Data

CategoryNo of Bond OfferNo of Bond Bid forNo of time Subscribe
Day 610 Dec 2012
Category 130,00,0006,05,6750.20
Category 215,00,00071,24,0224.75
Category 315,00,00030,16,0172.01
Category 440,00,00096,30,8592.41
Total1,00,00,0002,03,76,5732.04
Day 57 Dec 2012
Category 130,00,0003,55,5200.12
Category 215,00,00040,67,6712.71
Category 315,00,00028,11,3301.87
Category 440,00,00083,77,0212.09
Total 1,00,00,0001,56,11,5421.56
Day 46 Dec 2012
Category 130,00,0001,05,4200.04
Category 215,00,0009,97,5710.67
Category 315,00,00026,82,1301.79
Category 440,00,00077,93,3201.95
Total1,00,00,0001,15,78,4411.16
Day 35 Dec 2012
Category 130,00,0001,04,2950.0348
Category 215,00,0009,75,0460.6500
Category 315,00,00025,62,3301.7082
Category 440,00,00070,00,0341.7500
Total1,00,00,0001,06,41,7051.0642
Day 24 Dec 2012
Category 130,00,0005,7750.0019
Category 215,00,0009,08,6400.6058
Category 315,00,00023,98,8301.5992
Category 440,00,00059,87,3571.4968
Total1,00,00,00093,00,6020.9301
Day 13 Dec 2012
Category 130,00,0005,1200.0017
Category 215,00,0007,34,0900.4894
Category 315,00,00016,03,7201.0691
Category 440,00,00042,07,6711.0519
Total1,00,00,00065,50,6010.6551

Allotment/Listing

Allotment Listing Details REC Tax Free Bonds

REC Tax Free Bond
Issue OpenDec 3, 2012
Issue Close Dec 10, 2012
Issue RegistrarKarvy Computershare
Listing ExchangeBSE / NSE
BSE Script Code961748 (10 yrs) & 961749 (15 yrs)
BSE Script ID722REC22TF & 738REC27TF
Coupon Rate7.22 (10 yrs) & 7.38 (15 yrs) Additional 0.50 Category IV
Allotment DateDec 19, 2012
Listing DateDec 24, 2012
ISIN NoINE020B07GW6 (10 Yr Bond)
INE020B07GX4 (15 Yr Bond)
Maturity Date19 Dec 2022 (10 yrs)
19 Dec 2027 (15 yrs)

Registrar of Issue :

Karvy Computershare Pvt Ltd

Trustee for Bondholders :

 

Depositories :

NSDL & CDSL

Downloads

For REC Tax Free Bond Application Form  - rajendra@puneinvest.com

or Investment In this Bond : Call Rajendra : 8007750904 or                                                         Mail : rajendra@puneinvest.com

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