Finance railways; earn tax free income

Indian Railway Finance Corporation Ltd (IRFCL) has come out with its tranche II bond issue with a coupon rate of 7.38% and 7.54% for 10 years and 15 years, respectively, for a retail investor.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney Tech Control
moneycontrol.com

Home » News » Markets » Bonds News

Feb 25, 2013, 12.15 PM | Source: Moneycontrol.com

Finance railways; earn tax free income

Indian Railway Finance Corporation Ltd (IRFCL) has come out with its tranche II bond issue with a coupon rate of 7.38% and 7.54% for 10 years and 15 years, respectively, for a retail investor.

Like this story, share it with millions of investors on M3

Finance railways; earn tax free income

Indian Railway Finance Corporation Ltd (IRFCL) has come out with its tranche II bond issue with a coupon rate of 7.38% and 7.54% for 10 years and 15 years, respectively, for a retail investor.

Post Your Comments

Share Cancel

Indian Railway Finance Corporation Ltd (IRFCL) has come out with its tranche II bond issue. The issue carries a coupon of 7.38% and 7.54% for 10 years and 15 years, respectively. Interest received on the bond is fully exempt from income tax. The pre-tax yield on the bond for the highest tax bracket investors, therefore, works out to 10.68% and 10.91% for 10 years and 15 years, respectively, higher than 8.5-9% on bank fixed deposit and other stable fixed income instruments. CARE and Icra have assigned AAA rating for the bond issue, which is the highest credit rating. IRFCL is a wholly-owned government company, which finances the railways. The company’s performance has been rated excellent for 11 years in a row by the Department of Public Enterprises. The bonds issued by the company will be secured by creating a first pari passu charge on the movable assets of the company. The bonds, therefore, are a safe avenue to earn tax free income.

Analysis

IIFCL’s tax free bond comes with a coupon rate of 7.38% and 7.54% for 10 years and 15 years, respectively, for a retail investor. Interest received on the bond is fully exempt from income tax. The pre-tax yield on the bond for the highest tax bracket investors, therefore, works out to 10.68% and 10.91% for 10 years and 15 years, respectively, higher than 8.5-9% on bank fixed deposit and other stable fixed income instruments.

To read the full report click here

Buy, Hold, Sell ? Hear it first on M3
Finance railways; earn tax free income

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login