Recently Govt have allowed few public sector companies to raise capital through Tax Free bonds. NTPC – A Maharatna status – Govt of India enterprise has come up with issue of Secured, tax free bonds issue which will open on September 23, 2015.
NTPC is one of the largest power generation and distribution company have presence in diversified areas like Hydro power,nuclear power,Renewable energy,Coal mining,Power trading,Fly ash utilization,Equipment manufacturing through subsidiaries or through strategic alliances.
Tax Free bonds shall be issued for a period of 10,15 and 20 years and investor have a choice to subscribe the issue for a period of its choice.
Interest received from this issue will be free from income tax.Investor can report this income but will not be added in income of investor.
Important Dates:
- Issue Open Date:Sept 23, 2015
- Issue Close Date:Sept 30, 2015.
Credit Rating:
AAA From ICRA, CARE and CRISIL which indicates highest safety of this issue.
Interest Rates:
Interest rate varies according to period of issuance.
| Tenure | Interest Rate p.a. |
| 10 Yrs | 7.36% |
| 15 Yrs | 7.53% |
| 20 Yrs | 7.62% |
Above rates are applicable to individual investors applying up to Rs.10 Lakh.Interest will be paid out annually.
Interest received is tax free in hands of investors.
Mode of issuance:
NTPC tax free bonds will be issued only in demat form so if you wish to invest in this issue then you need to have a demat account.
should you subscribe for NTPC Tax Free Bonds:
Any one who need long term, periodic, fixed income can subscribe for this issue.We are in downward interest rate scenario and interest rates of deposits can move downward even below 7% till next year.Investor can sell the bonds only through secondary market.so ascertain that you will not need money in nearer feature.
