Please note that National Highways Authority of India (NHAI) has come out with a Tax Free NCD issue of Rs. 5,000 crores with an option to retain over subscription upto Rs. 5,000 crores aggregating to a total of Rs. 10,000 crores.
Key Features:
Issue Open On: December 28, 2011
Issue Closes On: January 11, 2011
Rating: "Care AAA" by Care; "AAA/Stable" by Crisil & "AAA/Stable" by FITCH
Options: Series I: Tenor of 10 years with an annual coupon payment of 8.20% p.a.
Series II: Tenor of 15 years with an annual coupon payment of 8.30% p.a.
Call / Put Option: Not Applicable
Minimum Application: Rs. 50,000 & in multiples of Rs. 1,000 thereof
Investment Rationale:
· AAA rated paper available at 8.20 / 8.30% p.a. tax free, i.e. a yield of 12.25 – 12.30% pre tax. Comparable papers are trading at a YTM of 9.00 – 9.25%
· We expect this paper to list at 1.5 - 2.5% premium. Clients can sell on listing or hold
· During the subscription period, 4% interest is paid by NHAI on the unalloted amount and 8.20 / 8.30% on the allotted amount. Hence, clients can divert their liquid fund holdings to this issue
· Good response expected from QIBs and HNIs
· For clients who wish to hold - FD+ returns. SBI Bank's 3 year FD currently yields ~9.00% p.a.
Who should invest:
· Clients with cash surpluses / fixed income allocation
· Clients who are invested into liquid / liquid plus funds
· Corporate Treasuries
· Non – resident Indians
Client Suitability:
· Aggressive – 15% of the current 50% fixed income allocation
· Balanced – 10% of the current 60% fixed income allocation
· Conservative – 10% of the current 100% fixed income allocation
Ask for application forms.
warm regards
Zoher Doctor / Smart Money Inc
Financial Planner
+91 9824063400
+91 265 6454851
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Disclaimer
Information, charts or examples contained in this mail is for illustration and educational purposes only. It should not be considered as advice or an endorsement to purchase or sell any security or its financial instrument until you are well conversant and confident about the movement.
For indiviual guidance please write to me seperately at zoherdoctor@gmail.com
Visit Us at: www.smartmoneydirect.co.in
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