Details of NHAI Tax Free Bonds

NHAI (National Highway Authority of India), a wholly owned Government of India enterprise formed under an Act of Parliament under the Ministry of Roads, Transport & Highways. An autonomous organization of Government of India under the Ministry of Road Transport & Highways, which was constituted on June 15, 1989 by an act of Parliament - The National Highways Authority of India Act, 1988. NHAI commenced operations in February, 1995.

Achievements

• NHAI is, responsible for the development, maintenance and management of National Highways having a total length of 70,548 kms, serving as the arterial network of the country.

• It was constituted mainly to survey, develop, maintain and manage National Highways, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it, to regulate and control plying of vehicles, to develop and promote consultancy and construction services and to collect fees for services and benefits rendered.

• Mandated to implement National Highways Development Project (NHDP) which is India's largest ever highways project and comprises of world-class roads with uninterrupted traffic flow.

• Cess of 50 paisa per litre on petrol and diesel levied for utilizing exclusively for development and maintenance of National Highways

 

  

Issue Program

Issue Opening Date:  28th December, 2011

Issue Closing Date: 11th January, 2012

Deemed Date of Allotment : The Deemed Date of Allotment shall be the date as may be determined by the Board or Committee and notified to the BSE and NSE.

 

 

Issue Size (Rs in Crs)

Tax Free Secured Redeemable Non-convertible Bonds aggregating up to Rs 5,000 crs with an option to retain oversubscription upto the Shelf Limit (i.e. upto Rs 10,000 crs).

Who Can Apply

Category I:

• Public Financial Institutions, Statutory Corporations, Commercial Banks, Co-  

  Operative Banks and Regional Rural Banks, which are authorized to invest in the

  Bonds; Provident Funds, Pension Funds, Superannuation Funds and Gratuity Fund,

  which are Authorized to invest in the Bonds, Insurance companies registered with

  the IRDA

• National Investment Fund, Mutual Funds, Foreign Institutional Investors (Including 

   Sub accounts)

 

• Companies; bodies corporate and societies registered under the applicable laws in

   India and authorised to invest in the Bonds, Public/private charitable/religious

   trusts which are authorised to invest in the Bonds, Scientific and/or industrial

   research Organisation, which are authorised to invest in the Bonds;

 

• Partnership firms in the name of the partners, Limited liability partnerships formed

  and registered under the provisions of the Limited Liability Partnership Act, 2008

  (No. 6 of 2009)

 

Category II

 

The following investors applying for an amount aggregating to above Rs.5 lakhs across all Series in each tranche

 

• Resident Indian individuals;

• Hindu Undivided Families through the Karta and

• Non Resident Indians on repatriation as well as non-repatriation basis.

 

Category III

The following investors applying for an amount aggregating to upto and including Rs.5 lakhs across all Series in each tranche

 

• Resident Indian individuals;

• Hindu Undivided Families through the Karta and

• Non Resident Indians on repatriation as well as non-repatriation basis.

Applications cannot be made by:

 

• Minors without a guardian name
• Foreign nationals
• Persons resident outside India other than NRIs
• Overseas Corporate Bodies

Bond Rating:

 

 “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE and “Fitch AAA (India)” by FITCH

My View:

These Bonds are very Ideal for the Investor who is looking out for Safe & Steady Returns in Debt Market. These bonds will suit well for the High Income category who are in 20% to 30% Tax Bracket. Investors who predominately invest in Fixed Deposit or Company deposit should ideally invest in such type of bonds. The opportunity of earning such high returns comes once in 4 to 5 years.   The Bonds are offering 8.30%*P.A TAX FREE Returns. If you fall under 30% Tax Bracket, then your Effective Return would be 11.85% (Before Tax). The Best part of this bonds are that they are Tradeable in NSE &BSE, so their will be an easy liquidity too. Investor can also opt for Physical bond if they do not have demat account. Investor who wants to invest, should submit their application on the first day itself , because the allotment will be done on first come first serve basis