Issue Opening Date: February 25’ 2013
Issue Closing Date: March 13’ 2013
Credit Ratings: “CRISIL AAA/Stable” by CRISIL, “[ICRA] AAA” by ICRA , “CARE AAA (pronounced as triple A)” by CARE.
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Mode of issue and nature of instrument: Public issue by Indian Railway Finance Corporation Limited of tax free, secured, redeemable, non-convertible bonds of face value of Rs. 1,000 each in the nature of debentures having tax benefits under section 10(15)(iv)(h) of the Income Tax Act, 1961, as amended, aggregating up to Rs. 8,886.40 Crores in the Fiscal Year 2013. The Bonds will be issued in one or more tranches subject to the Shelf Limit.
This Tranche Issue by the Issuer of bonds aggregating to Rs. 1,000 Crores with an option to retain oversubscription upto the Residual Shelf Limit* and is being offered by way of this Prospectus Tranche-2 containing, inter alia, the terms and conditions of the Tranche-2, which should be read together with the Shelf Prospectus dated December 21, 2012 and the Public Notice/Addendum dated January 15, 2013 filed with the registrar of companies, national capital territory of Delhi and Haryana, Designated Stock Exchange, NSE and SEBI.
* The Residual Shelf Limit for the Issue shall be the Shelf Limit net of the amount mobilized through Tranche – 1 Issue and by amounts raised by issuance of the Bonds on the basis of any further a private placement, if any. Pursuant to the CBDT Notification, our Company may raise funds through private placement not exceeding an aggregate of Rs. 2,500 Crores, i.e. upto 25% of the allocated limit for raising funds through Tax Free Bonds during Fiscal Year 2013
Interest on application money: At the rate of 6.88% per annum and 7.04% per annum for the Tranche-2 Series I Bonds and Tranche-2 Series II Bonds, respectively for Allottees under Categories I, II and III and 7.38% per annum and 7.54% per annum for the Tranche–2 Series I Bonds and Tranche–2 Series II Bonds, respectively for Allottees under Categories IV.
Face Value / Issue Price (Rs.): Rs. 1,000 per Bond.
Minimum Application: 5 Bonds (Rs. 5,000) across all Series of Bonds.
Depositories: NSDL and CDSL
Issuance mode: In dematerialized form as well as physical form, at the option of Applicants.
Trading mode: *In dematerialized form only
TAX Highlights & Features:
- Interest from these Bonds do not form part of total income as per provisions of Section 10 (15) (iv) (h) of Income Tax Act, 1961 read along with Section 14A (1) of the IT Act.
- There shall be no deduction of tax at source from the interest payable on the Bonds.
- Wealth Tax is not levied on investment in bonds under section 2(ea) of the Wealth-tax Act, 1957
- As per Section 2 (29A) of the IT Act, read with section 2 (42A) of the IT Act, the Bonds since listed on BSE Limited (“BSE”), shall be treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of transfer. Under section 112 of the Income Tax Act, 1961, capital gains arising on the transfer of long term capital assets being listed securities are subject to tax at the rate of 20% of capital gains calculated after reducing indexed cost of acquisition or 10% of capital gains without indexation of the cost of acquisition.
- Bonds can be held in physical or in dematerialized form, at the option of bondholders but the trading of the Bonds shall be in dematerialized form only.
Who can apply?
Category I (QIB Portion)
- Public Financial Institutions, scheduled commercial banks, multilateral and bilateral development financial institutions, state industrial development corporations, which are authorised to invest in the Bonds;
- FIIs and their sub – accounts (other than a sub-account which is a foreign corporate or foreign individual), registered with SEBI;
- Provident funds and pension funds with minimum corpus of ` 2,500 lakhs, which are authorised to invest in the Bonds;
- Insurance companies registered with the IRDA;
- National Investment Fund;
- Insurance funds set up and managed by the army, navy or air force of the Union of India or set up and managed by the Department of Posts, India;
- Mutual Funds; and
- Alternative Investment Funds, subject to investment conditions applicable to them under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
Category II (Corporate Portion)
- Companies within the meaning of section 3 of the Companies Act and bodies corporate registered under the applicable laws in India and authorized to invest in Bonds
Category III (High Net Worth Individual Portion)
The following Investors applying for an amount aggregating to above Rs 10 lakhs across all Series of Bonds in each Tranche Issue:
• Resident Indian individuals;
• Eligible NRIs on a repatriation or non – repatriation basis; and
• Hindu Undivided Families through the Karta.
Category IV (Retail Individual Investor Portion)
The following Investors applying for an amount aggregating to up to and including Rs 10 lakhs across all Series of Bonds in each Tranche Issue:
- Resident Indian individuals;
- Eligible NRIs on a repatriation or non – repatriation basis; and
- Hindu Undivided Families through the Karta.
Got questions, email us: email@example.com
Source: Shelf Prospectus dated December 21, 2012 and Prospectus Tranche – 2 dated February 13, 2013.
Disclaimer: “Invest only after referring to final prospectus”.
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- Making documents available online in an electronic format does not constitute an offer to sell or the solicitation of an offer to buy securities in Indian Railway Finance Corporation Limited – IRFCL (“Issuer”). Further, it does not constitute a recommendation by NriInvestIndia.com (ni2 Financial Consultancy Pvt Ltd) or any other party to sell or buy securities in Indian Railway Finance Corporation Limited – IRFCL.
- Use of our website confirms your acceptance to the terms and conditions related to the Issue as provided in the Draft Shelf Prospectus of Indian Railway Finance Corporation Limited – IRFCL bonds and Prospectus Tranche (referred as the “Prospectus”). You also confirm that you are eligible to make an application for the Issue and the decision to invest in the Issue is based on your own discretion and your examination of the Issuer and the Issue and based on disclosures made in the Prospectus.