Prajna Capital

NHAI tax free bonds opens on 28 December 2011 and Issue closes on 11 Jan 2012
FOREIGN Institutional Investors (FIIs) shift assets from equity to infra bonds
Muthoot Finance Non-Convertible Debentures Jan 2012
SBI Mutual Fund new SBI Debt Fund Series Funds
Mutual Fund Application Forms
Muthoot Finance NCD

NHAI tax free bonds opens on 28 December 2011 and Issue closes on 11 Jan 2012

Posted: 27 Dec 2011 03:22 AM PST

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UNFAZED by uncertainty in the capital markets, the National Highways Authority of India (NHAI) will launch its first ever tax-free bonds issue of Rs 10,000 crore on December 28.

The issue will close on December 30, a senior road transport ministry official said.

The official further said the interest (coupon) rate of the bonds issue will be between 8 and 8.5 per cent, while refusing to disclose the exact number.

"A formal announcement will be made by road transport minister CP Joshi and you should wait for that," the official said, adding that the money raised from it will be used to partly finance various national highways projects under different government schemes.

"Some money will also be used for viability gap funding for BOT (build-operate transfer) road contracts," the official added.

As per the prospectus filed by NHAI with the market regulator, the Securities and Exchange Board of India (Sebi), the bonds will have two maturity periods of 10 and 15 years, and would get listed on the BSE and the National Stock Exchange.

In this year's budget, the government had allowed NHAI to raise Rs 10,000 crore from the tax-free bonds, an instrument never used by it earlier. Till now, it used to raise funds through issue of 54EC bonds, under which subscribers can claim exemption of capital gains tax.

Citing the provisions of income tax rules, the NHAI prospectus has, however, clarified that only the interest earned on the new bonds will be tax-free, not the actual investments.

Moreover, investors will be liable to pay capital gains tax as applicable, it further said.

According to the NHAI prospectus, the bonds issue will worsen its debt-to-capital ratio from 0.11 to 0.29 if it raises Rs 10,000 crore from the markets. The debt-to capital ratio reflects the financing strengths of a firm.

Higher the ratio, the more debt the company has, compared to its equity.

As of June 30, the NHAI's total debt (including secured loans) stood at Rs 6,636.21 crore.

The bond issue has got AAA (stable) rating from the three agencies — Crisil, CARE and Fitch.

SBI Caps, ICICI Securities, Kotal Mahindra Capital and AK Capital Services have been appointed as the lead managers by the NHAI for the bonds issue.

How to apply?

You can download the forms below

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FOREIGN Institutional Investors (FIIs) shift assets from equity to infra bonds

Posted: 27 Dec 2011 01:57 AM PST

Current open Long Term Infra Bond Application form

FOREIGN Institutional Investors (FIIs) may be net sellers in the domestic equity market, but they have not yet lost faith in the world's most populous democracy yet. These big investors have simply shifted focus to the country's debt market.

In October and November, FIIs invested Rs 5,540 crore or over $1 billion in long-term infrastructure debt instruments of companies, which have a oneyear lock-in and a residual maturity exceeding one year, new data put out by the capital markets regulator Sebi showed.

Attractive yields in India and expectations of a drop in interest rates, which would lead to capital appreciation on higher coupon bonds, are driving these savvy investors to the bond street. The Union government had revised the modalities for FII investment in this category of debt instruments in September by reducing the lock-in period to one year with one-year residual maturity.

FIIs have been allowed to invest up to $5 billion (Rs 26,951 crore) out of the total limit of $25 billion in long-term corporate infra bonds in India.

Earlier, FII investment in long-term corporate infrastructure bonds had a minimum lock-in period of three years, though FIIs were allowed to trade among themselves during the lock-in period. However, the investments could be sold to domestic investors during this period.

Over the past two months, some clarity has emerged on the inflation front and also the fact that growth is falling, which has led the market to believe that monetary cycle reversal is round the corner. This effectively makes the debt instruments attractive.

The reduction of the lock-in period to a third kick started activity in the bond market. October and November saw FIIs invest Rs 2,095 and Rs 3,445 crore in corporate debt long-term infra bonds with one-year lock-in and oneyear residual maturity. In contrast till September 30, FII investment in corporate long-term infra bonds with three-year lock-in and with three-year residual maturity had by and large remained unutilised.

The total FII limit in such corporate bonds is Rs 22,419 crore. This means a limit of Rs 16,879 crore is still available for FII investments in such bonds. However, analysts are not sure if the remaining investment limit in long-term corporate infra bonds will receive equally strong FII response given the macro-economic conditions globally, which has triggered to a flight to safety.

The situation outside is not great. It needs to be seen what kind of institution and sector FIIs are investing in. The investment might be going to project specific debt or it could be private equity investments through structured products, which may later be converted into equity. Sebi monthly data on FIIs' debt investment showed that they have almost exhausted the limit set for such investments in Indian gilts. As of November 30, FII investment limit in government debt of Rs 43,650 crore was almost exhausted with just Rs 651 crore additional limit available.

As per Sebi data, FIIs have invested Rs 39,607 crore in the debt segment so far in 2011 while they have been net-sellers to the extent of Rs 2,969 crore in the equity segment.

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Application form for Applying for Tax Saving Long Term Infrastructure Bond

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Muthoot Finance Non-Convertible Debentures Jan 2012

Posted: 26 Dec 2011 10:16 PM PST

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About Muthoot Finance Limited

Muthoot Finance Ltd is a NBFC incorporated in 1997 primarily provides loan against household used jewellery and offers other products and services like money transfer, insurance, securities, foreign exchange, vehicle and asset finance services. Gold loans account for 99% of Muthoot's assets under management with predominant exposure to South India.

Issue Size

The company plans for a public issue of secured, redeemable, non-convertible debentures (NCDs) of face value of Rs 1,000 each aggregating upto Rs 300 crore with an option to retain over subscription up to Rs 300 crore, aggregating to a total of upto Rs 600 crore.

Objective of the issue:

The funds raised through this Issue will be utilized for various financing activities including lending and investments, to repay existing liabilities or loans and towards business operations including capital expenditure and working capital requirements, after meeting the expenditures of and related to the issue and subject to applicable statutory/regulatory requirements.

Issue Dates:

Issue Open: Dec 22 2011

Issue Close: Jan 07 2012

Investment Options

There are 4 options through which investment can be made in Muthoot Finance NCD as described in the picture below.

Ratings

The NCDs under this issue have been rated as AA -/Stable by CRISIL and ICRA. The rating indicates a high degree of safety with regard to timely servicing of financial obligations on the NCDs and such instruments carry a very low credit risk.

Why Invest in Muthoot Finance NCD

The interest rate of 13-13.43% is being offered to individuals for duration of 2 years, 3 years, as well as 5 years, 5.5 years is an attractive opportunity when compared to bank deposits which offer interest rate ranging 9 - 10.25%. Unlike bank deposits there is no TDS for the interest rate payments. These are secured instruments and hence backed by assets of the company. The NCDs will be listed in the BSE and NSE hence there is a chance for capital appreciation in case the RBI starts reducing interest rates after some month.

How to apply to Muthoot Finance NCD?

You can download the forms below

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SBI Mutual Fund new SBI Debt Fund Series Funds

Posted: 26 Dec 2011 06:31 AM PST

SBI Mutual Fund has announced the launch of the following three FMPs:

Schemes	Opening Date	Closing Date
SBI Debt Fund Series-90Days-53	26-Dec-11	26-Dec-11
SBI Debt Fund Series-367Days-12	27-Dec-11	27-Dec-11
SBI Debt Fund Series-18Months-10	28-Dec-11	30-Dec-11

The minimum investment in all schemes will be Rs. 5000 and in multiples of Rs.10 thereafter. The schemes will have both growth as well as dividend option. These FMPs will listed on the Bombay Stock Exchange.

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Application form for Applying for Tax Saving Long Term Infrastructure Bond

Current open Long Term Infra Bond Application form

Submit filled up application Collection canter near you

---------------------------------------------

Buy Tax Saving Mutual Funds Online by selecting the Mutual Fund Schemes

Mutual Funds Online

Download Tax Saving Mutual Fund Applications / Forms from all AMCs:

Download Mutual Fund Applications

Mutual Fund Application Forms

Posted: 26 Dec 2011 06:27 AM PST

Download Mutual Fund Application Forms, Mutual Fund Additional Purchase Forms, Mutual Fund SIP / STP / SWP Forms, ECS Stoppage Forms, and Other Mutual Fund Service Forms for ALL Mutual Funds from this single location.

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