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Housing and Urban Development Corporation Ltd (HUDCO) Bonds – Download Application Form
Issue: Housing and Urban Development Corporation Limited (HUDCO) Bonds – Tax-free, Secured, Redeemable and Non-convertible Bonds
Issue opens: 27 January 2012
Issue closes: 6 February 2012
Credit Rating: Fitch AA+ (ind) by FITCH & CARE AA+ by CARE.
Allotment Basis: First-come-First-serve basis.
NEED APPLICATION??
DOWNLOAD >> Housing and Urban Development Corporation Limited (HUDCO) Bonds Application Form | >> CLICK HERE << |
BOND PARTICULARS:
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TAX BENEFITS
1. The income by way of interest on these Bonds shall not form part of total income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961;
2. There shall be no deduction of tax at source from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors;
3. As per provisions under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed Bond is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer. Under section 112 of the I.T. Act, capital gains arising on the transfer of listed Bonds shall be taxed @ 10% without indexation;
4. Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957.
SALIENT FEATURES:
- The Bonds are issued in the form of tax-free, secured, redeemable, non-convertible bonds and the interest on the Bonds will not form part of the total income.
- In case of over-subscription; allotment shall be on first cum first serve basis upto the date falling 1 day prior to the date of oversubscription and on proportionate basis on the date of oversubscription.
- Credit rating agency CARE has rated the bonds “CARE AA+” & FITCH has rated the bonds “Fitch AA+ (ind)”. Instruments with this rating are considered to have the high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
- The bonds are fully secured by way of floating first pari passu charge on the present and future receivables of the company to the extent of amount mobilized under the issue. The security cover is 1.0 times of the outstanding Bonds at any point in time.
- The Bonds bear an attractive coupon rate; 8.10% p.a. for Tranche 1 Series 1 (bonds maturing after 10 years) and 8.20% p.a. for Tranche 1 Series 2 (bonds maturing after 15 years). (Tax free).
- HUDCO shall pay 8% p.a. for Tranche 1 Bonds as interest on the Application amount retained.
- HUDCO shall also pay 4% p.a. on refund of application amount. Such interest shall be paid along with the monies liable to be refunded.
- Issuance will be in DEMAT as well as PHYSICAL form. The bonds will be listed on both BSE and NSE; facilitating trading of these bonds.
- Investors can pledge or hypothecate these bonds to avail loans.
NOTE:
For all the categories Tranche-I Series 1 Bonds and Tranche- I Series 2 Bonds shall carry interest at the coupon rate of 8.10% p.a. and 8.20% p.a., respectively, payable annually on the Interest Payment Date.
However, an additional interest at the rate of 0.12% p.a. and 0.15% p.a. shall be payable to the Allottees under Category III for the Tranche-I Series 1 Bonds and Tranche- I Series 2 Bonds respectively. Accordingly, Tranche-I Series 1 Bonds and Tranche- I Series 2 Bonds Allotted to Category III Investors, shall carry an aggregate coupon rate of 8.22% p.a. and 8.35% p.a., respectively, payable annually on the Interest Payment Date.
Please note that the aforesaid additional interest of 0.12% p.a. and 0.15% p.a. shall only be available to the original Allottees and shall not be available in the following instances:
1. In case the Bonds are sold and/or transferred by the original allottee, the transferee will not be entitled to receive the interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and Tranche- I Series 2 Bonds respectively and shall only be entitled to receive the interest at the coupon rate of 8.10% p.a. and 8.20% p.a., for the Tranche- I Series 1 Bonds and the Tranche- I Series 2 Bonds respectively. However, in case of any transfer by a permanently disabled Allottee to their legal heir(s), the transferee shall continue to be entitled to receive interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and the Tranche- I Series 2 Bonds respectively.
Where the Bonds are held in joint names and subsequently there is a change in the sequence of the names of the joint Bondholders, the joint Bondholders subsequent to such change in sequence of names, will no longer be entitled to receive the interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and the Tranche- I Series 2 Bonds respectively and shall only be entitled to receive the interest at the coupon rate of 8.10% p.a. and 8.20% p.a., for the Tranche- I Series 2 Bonds and the Tranche- I Series 2 Bonds respectively. However, in case of change in name of any of the joint Bondholders, such joint Bondholders shall continue to be entitled to receive interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and the Tranche- I Series 2 Bonds respectively.
DOWNLOAD HUDCO Tax Free Bond Application >> CLICK HERE <<
Why Invest in India?
These days, India is the place to be, with its rapidly growing economy, thriving population and fast paced development; it’s definitely the best emerging market. The Indian economy is starkly different from what it was even a decade ago and is now on a growing curve which is rapidly rising. Today, the Indian economy has a considerable and stable growth rate, great foreign exchange reviews and capital markets which are flourishing.
A clever investor will therefore see this as the golden opportunity that it really is and invest in the Indian economy because the returns are going to be nothing short of phenomenal. Even a decade ago, foreign investors were not being welcomed into the Indian market, but things have changed quite a bit since then because of the phenomenon of rapid globalization.
** Get Free Investment Advice: Know More >>
Government Incentives
The long term capital gains for foreign companies have been reduced to twenty percent! Previously, there used to be a ban against the use of foreign trademarks and brand names. But this has been removed. Now foreign trademarks can be used within the country freely. Moreover, the Indian budget has been steadily lowering the tax rates for foreign companies over the years. Both types of firms – Indian as well as foreign – have been exempted from paying export earnings!
In short, the government is making up for all the lost time it spent in driving away foreign investors and doing everything it can to invite them. The Securities Exchange Board of India (SEBI) has recently come up with guidelines which are nothing, if not encouraging toward foreign brokers. With the help of this, Foreign Brokers can now choose to set up Rupee or foreign currency denominated accounts to credit fees, brokerages and other expenditure of similar nature; indirectly facilitating online investing in India easy.
India has a very bright future ahead because of the fast paced development that the country has been going through. Another reason why foreign investors should invest in the country is the sheer size. It has a GDP of 1.3 trillion US dollars currently and that is saying something! This makes it the eighth largest economy in the world.
If the Low cost base is taken into account, then the GDP actually trebles, making it about 3.8 trillion US dollars. And it is soon set to be among the top three economies in the world – after the US and China, considering these PPP terms.
Economy and Population
The fast growth in India’s economy, despite the recession is another reason why foreign investors find it so attractive. It is growing at a steady rate of 8.75% and this growth rate is set to increase by 9 to 10% every year for the next decade or so. These figures are really impressive because India is showing a great resilience in the face of global recession which has hit the top economies of the world.
The Indian economy also offers high savings. The average rate is about 37% of the GDP which is quite a lot. The domestic savings meets most of India’s investment requirements and just about 20% of India’s total public debt is sourced from foreign borrowing!
India is also a relatively young country with an average age of just twenty five years. Investing in a thriving, bustling economy like this, full of young blood is sure to bring back sizeable returns. Over the next two decades, India’s working age population is set to reach an all time high of two hundred and forty million. The workforce is an extremely talented one, with a high degree of morals, integrity, skills in English and of course entrepreneurial skills. So if you are looking to invest, invest in India!
** Free Consulting to Invest in India: Know More >>
