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Old 13-12-2015, 03:02 PM
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Default Secured Tax Free Bond – NHAI Ltd

Brief Issue Details:
Issue of Bonds
Public Issue of Tax Free, Secured, Redeemable, Non Convertible Bonds of face value of Rs.1,000 each in
the nature of Debentures having tax benefits under section 10(15)(iv)(h) of the Income Tax Act, 1961, as
amended.This tranche issue by the issuer is of bonds for an amount of Rs.1,000 crore (“Base Issue Size”)
with an option to retain oversubscription of upto Rs.9000 crore aggregating upto Rs.10,000 crore (“Tranche
I Issue”).
Face Value Rs.1,000 per Bond
Issue Price per Bond Rs.1,000 per Bond
Minimum Application 5 Bonds (Rs. 5,000) (individually or collectively, across all Series of Bonds) & in the multiple of1 Bond (Rs.
1,000) thereafter
Rating “CRISIL AAA/Stable” by CRISIL, “[ICRA] AAA” by ICRA, 'CARE AAA’ by CARE and “IND AAA” by IRRPL
Form of Issuance Dematerialized form or physical form as specified by an Applicant in the Application Form.
Nature of Indebtedness and
Ranking/ Seniority
The claims of the Bondholders shall be superior to the claims of any unsecured creditors of NHAI and
subject to applicable statutory and/or regulatory requirements. Further, the claims of the Bondholders shall
Issue Key Highlights Issue Size: Category I (20%)
QIBs
Category II (20%)
Corporates
Category III
(20%)
High Networth
Individuals (IND,
HUF >= 10L)
Category IV
(40%) Retail
Individual
Investors (IND,
HUF <= 10L)
Issue Opens ec 17, 15 Basic: Rs.1000.0 Cr Rs. 200.0 Cr Rs. 200.0 Cr Rs. 200.0 Cr Rs. 400.0 Cr
Issue Close*ec 31, 15 Oversub. Rs.9000.0 Cr Rs.1800.0 Cr Rs.1800.0 Cr Rs.1800.0 Cr Rs.3600.0 Cr
Total Rs.10000.0 Cr Rs.2000.0 Cr Rs.2000.0 Cr Rs.2000.0 Cr Rs.4000.0 Cr
Basis of Allocation in
case of oversubscription
On First Come
First Serve Basis
On First Come
First Serve Basis
On First Come
First Serve Basis
On First Come
First Serve Basis
Secured Tax Free Bond – NHAI Ltd
Wealth Management
Secured Tax Free Bonds – NHAI Ltd
rank pari passu inter se to the claims of other secured creditors of NHAI having the same security.
Tax Benefit
A) 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,
B) There will 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.
C) 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;
Debenture Trustee SBICAP Trustee Company Limited
Registrar and Transfer Agent Karvy Computershare Private Limited
Object
The objects of NHAI as specified in NHAI Act permits it to undertake its existing activities as well as the
activities for which the funds are being raised through the Issue. NHAI intends to deploy the Issue
proceeds towards part financing of the various projects being implemented by NHAI under the NHDP and
other National Highway projects as approved by the GoI.
Security
The Bonds shall rank pari passu inter-se, and shall be secured by way of first pari passu charge on the
fixed assets of NHAI, as mentioned in the Bond Trust Deed to the extent of atleast 100% of the amounts
outstanding and interest accrued thereon in respect of the Bonds at any time. The mode of creation of
security requires prior approval and authorization from the Government of India. The Issuer has received
the no-objection certificate from the Government of India in respect thereof.
Interest Payment Frequency Annually
Listing The Bonds are proposed to be listed on BSE & NSE
Interest Payment Date First Interest on April 01, 2016 and subsequently on April 01 every year except the last interest payment
along with the redemption amount which will happen on Redemption Date
Interest on Application Money
The Company pay interest on Application Amounts on the amount Allotted, subject to deduction of income
tax under the provisions of the Income Tax Act, 1961 as applicable, to any Applicants to whom Bonds are
allotted (except for ASBA Applicants) pursuant to the Issue from the date of realization of the
cheque(s)/demand draft(s) upto one day prior to the Deemed Date of Allotment, at the rate of 7.14% p.a.
and 7.35% p.a. on Tranche I Series IA and Tranche I Series IIA respectively for Allottees under Category I,
Category II and Category III Portion, and at the rate of 7.39% p.a. and 7.60% p.a. on Tranche I Series IB
and Tranche I Series IIB respectively for Allottees under Category IV Portion. A tax deduction certificate
will be issued for the amount of income tax so deducted.
Interest on Application Money
Refund
The Company pay interest on application money which is liable to be refunded to the applicants (other than
Application Amounts received after the Issue Closure Date, and ASBA Applicants) in accordance with the
provisions of the SEBI Debt Regulations, or other applicable statutory and/or regulatory requirements,
subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, as
applicable, from the date of realization of the cheque(s)/demand draft(s) upto one day prior to the Deemed
Date of Allotment, at the rate of 5% per annum. A tax deduction certificate will be issued for the amount of
income tax so deducted.
Recent Tax Free Bond Issues – A Bird’s Eye View :
A comparative analysis of the Tax Free Bond issues in the recent past are tabulated below for your benefit.
Particulars Issue Closed Issue Closed Issue Closed Issue Closed
Company Name IRFC REC PFC NTPC
Issue Type Public Public Public Public
Opening Date 8-Dec-15 27-Oct-15 05-Oct-15 23-Sep-15
Closing Date 8-Dec-15 27-Oct-15 05-Oct-15 23-Sep-15
FV (Rs.) 1,000 1,000 1,000 1,000
Issue Size Rs.4532 Rs. 700 Cr Rs. 700 Cr Rs. 700 Cr
Amount Mobilized Rs.10796.30 Cr Rs.2803.71 Cr Rs.8461.17 Cr Rs.4417.58
Rating AAA by Crisil, CARE, ICRA
& IRRPL
AAA by Crisil, CARE, ICRA
& IRRPL.
AAA by Crisil, CARE,
ICRA.
AAA by Crisil, CARE,
ICRA.
Listing BSE & NSE BSE BSE BSE & NSE
For 10 year 7.32 (For Ret) &
7.07 (For Non Ret)
7.14 (For Ret) &
6.89 (For Non Ret)
7.36 (For Ret) &
7.11 (For Non Ret)
7.36 (For Ret) &
7.11 (For Non Ret)
For 15 year 7.53 (For Ret) &
7.28 (For Non Ret)
7.34 (For Ret) &
7.09 (For Non Ret)
7.52 (For Ret) &
7.27 (For Non Ret)
7.53 (For Ret) &
7.28 (For Non Ret)
For 20 year 7.50 (For Ret) &
7.25 (For Non Ret)
7.43 (For Ret) &
7.18 (For Non Ret)
7.60 (For Ret) &
7.35 (For Non Ret)
7.62 (For Ret) &
7.37 (For Non Ret)
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thx
nTuple

Disclaimer: I am not a Research Analyst and not registered with any regulating authority. All posts are for educational purpose only.

Consider us a dumb -dumble guy in this analysis, any type of real time example will be quick-learn approach.
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Old 13-12-2015, 08:58 PM
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A good one for periods like these . But is it compulsorily to lock in for 10 years ?
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