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HISTORY
INTRODUCT
ION
HISTORY FEATURES
Tenor 10 years 15 years 10 years 15 years 10 years 15 years 10 years 15 years 10 years 15 years
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SCHEDULE FOR FY
2012 - 13
The budget for FY 2012-13 had announced an amount of Rs. 60,000 crores under tax
free bonds. The notification however provides for Rs. 53,500 crores tax free bonds to
be issued by the following
Aggregate Amount of
Entities Bonds (Rupees
Crores)
National Highway Authority of India (NHAI) 10,000 Cr.
Indian Railway Finance Corporation (IRFC) 10,000 Cr.
India Infrastructure Finance Company Limited (IIFCL) 10,000 Cr.
Housing and Urban Development Corporation (HUDCO) 5,000 Cr.
National Housing Bank (NHB) 5,000 Cr.
Power Finance Corporation (PFC) 5,000 Cr.
Rural Electrification Corporation (REC) 5,000 Cr.
Jawaharlal Nehru Port Trust 2,000 Cr.
Dredging Corporation of India 500 Cr.
Tax free Port
Ennore bonds have been continued to provide low cost long term finance to the public
Limited 1,000sector
Cr.
infrastructure space
Issuers can raise resources under the tax free route through both private placement and public
issues. Private placements are expected to begin in November where as Public issues would
kick in from December 8
TERMS OF THE ISSUE (1/2)
Ceiling on Coupon
Retail Individual QIBs, Corporates and
investors HNIs
Individuals, HUFs, NRIs
investing up to Rs. 10 Lakhs
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TERMS OF THE ISSUE (2/2)
Reference Rate
10 Years 15 Years 20 Years
Average yield for 2 weeks ending 02-11-
8.16% 8.33% 8.36%
2012
Annualized Yield 8.32% 8.50% 8.53%
Limit on Coupon
Retail Individual investors QIBs, Corporates and HNIs
Withdrawal permitted
Public Provident Sec 80C
15 years 8.80% 8.80% only from 6th year, Tax Free
Fund (PPF) benefit
subject to restrictions.
Fixed Deposits - Withdrawal before
Sec 80C
National 5 years 9.58% 6.71% maturity is allowed at a Taxable
benefit
Housing Bank charge
Withdrawal before
Fixed Deposits None, TDS
5 years 8.50% 5.95% maturity is allowed at a None
SBI deductible
charge
5 year tenure, minimum
Senior Citizen's Sec 80C
5 years 9.00% 6.30% age 55, also available Taxable
Saving Scheme benefit
with public sector banks
National Saving No Maximum limit of Sec 80C Taxable but
10 years 8.90% 6.23%
Certificate investment benefit no TDS
Post Office Time 5 year tenure,, no max Sec 80C
5 years 8.77% 6.14% Taxable
Deposit Account limit. benefit
*Post tax return at tax bracket
10 & 15 ofyears
30%. The effect
Referof Section 80C deduction is no
Liquidity, not max
takenlimit,
in calculation
no of post tax returns.
The above data has been extracted on 7th November 2012 Same as respective websites of the issuers and other information available
from
Tax Free Bonds
in news. (20 years for slide min age, Capital gains None No TDS
annual int
IIFCL) #10 possible (slide #6) 11
MACROECONOMIC OUTLOOK
INTEREST RATE SCENARIO
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MARKET
OUTLOOK
RBI KEEPS POLICY RATES
The Reserve Bank of India (RBI) UNCHANGED
in its mid-quarter review of monetary policy on
30th October 2012 kept the repo rate and reverse repo rate unchanged at 8% and
7%, respectively. It reduced the CRR by 25 bps from 4.50% to 4.25%.
12%
10%
8%
6%
4%
2%
0%
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MARKET
OUTLOOK
12 GDP growth rate
Growth prospects for the economy expected to be revived by the 10
wave of reforms introduced by the central government. 8
Capital goods growth rate, an indicator of level of investment, has
GDP seen upward movement in recent months.
6
4
Growth IIP data in the past 2 months has seen upward movement. 2
IMF forecasted that the economy will grow by 4.9% during 2012. 0
The Indian macroeconomic scenario is quite stagnant and hence rate cuts look
imminent. Even RBI has signalled looking at the rates in the January- March quarter.
No major events in the next 4-6 months are likely to affect the capital markets
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drastically.
DISCLAIM
ER
This document is issued by SBI Capital Markets Limited (SBICAP) for general information purposes only, without regard to specific
objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation, and
should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities mentioned
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Nothing in this presentation is intended by SBICAP to be construed as legal, accounting or tax advice. Past performance is not a
guide for future performance. Forward-looking statements are not predictions and may be subject to change without notice.
Actual results may differ materially from these forward-looking statements due to various factors. This presentation and opinion, if
any, contained herein have been prepared by SBICAP based upon information available to the public and sources, believed to be
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THANK YOU
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