Tax Free IRFC bonds fall below face value; turn attractive

Published: Tuesday, March 20, 2012, 13:44 [IST]

The 15 year tax free bonds issued by the Indian Railways Finance Corporation (IRFC) at a face value of Rs 1000 in early February have now dipped below the face value.

The 15 year tax free Bonds were trading at Rs 999.90 on the National Stock Exchange. Interestingly, the tax free bonds issued with a duration of 10 years were trading above face value at Rs 1009.

The coupon rates at the time of the offer for retail investors was pegged at 8.15% and 8.3% for primary retail subscribers.

Interestingly, for those now purchasing these Bonds from the markets, the coupon will be reduced to 8% and 8.10% for 10 and 15-year terms, respectively, for all categories of investors.

The fall in the price below the face value will make the bonds attractive especially to high networth individuals who were denied full subscription. Income from these tax free bonds are tax free and do not form part of the total income.

GoodReturns.in

Story first published: Tuesday, March 20, 2012, 13:44 [IST]

Other articles published on Mar 20, 2012