IDFC Long Term Infrastructure Bonds

by Manshu on October 8, 2010

in Fixed Deposits

Also read about the REC Infrastructure bonds here or the IDFC Infrastructure Bonds Tranche 2 here.

Like NPS, I have not written much about Infrastructure Bonds, and reader Gaurav helped me yet again by providing some information to start off this post about Infrastructure bonds, and a big thanks to him for that.

Since IDFC is coming out with its long term infrastructure bonds – I thought I’d take this opportunity to tell you about the IDFC infrastructure bonds, as well as cover the basic concept as well.

Tax Saving Long Term Infrastructure Bonds

A popular reason to invest in long term infrastructure bonds is because they allow you to reduce Rs.20,000  from your taxable income over and above the Rs. 100,000 limit under Section 80 (C).

So, the most you can reduce your taxable income without using the long term infrastructure bonds is Rs. 100,000, but investing money in these bonds gets you an extra Rs. 20,000 off your taxable income, and you can reduce your taxable income by a total of Rs. 120,000 by investing in these long term infrastructure bonds.

This increases your effective yield because along with the interest you earn on these infrastructure bonds, you save on tax as well.

These bonds are good for a maximum of Rs. 20,000 as far as the tax saving aspect is concerned, so if you buy bonds worth Rs. 30,000 and nothing else, even then the maximum you can reduce from your taxable income is Rs. 20,000 because that is the cap on tax benefits on infrastructure bonds.

From whatever I’ve read – I think that the Direct Tax Code (DTC) will not impact the tax saving aspect of these long term infrastructure bonds, but if someone knows otherwise, then please leave a comment about it; I think there is a little bit of uncertainty about this.

Features of the IDFC Long Term Infrastructure Bond

The tax aspect that I spoke about earlier is of course one of the major benefits of the IDFC Infrastructure bonds, but let’s take a look at some of its other features as well.

Interest Rate of 7.5% or 8.0%

These bonds are getting issued under two lock in options:

1. Ten year maturity: The bond will be issued with a ten year maturity and offer 8.0% interest per annum.

2. Ten year maturity with an option for buy-back after 5 years: This bond will also be issued with a ten year maturity, but there will be buy back option after 5 years. The interest rate on this is 7.5% per annum.

Further, under each of these options, you can choose to get the interest accumulate or paid out to you annually.

Minimum Investment in the IDFC Long Term Infrastructure Bond

The face value of the infrastructure bond is Rs. 5,000, and you have to apply for a minimum of two bonds, so the minimum investment in this infrastructure bond is Rs. 10,000.

Open and Close date

The infrastructure bond issue opened on September 30th 2010, and will close on October 18th 2010.

Credit Rating

IDFC has received the LAAA by ICRA which is it’s highest rating, and these infrastructure bonds are secured debt also, so in that respect they are relatively safe.

Listing on the stock exchange

After the initial lock in period, the bonds will list on NSE and BSE, and you’d have an option of selling them on the exchange if you don’t want to wait till maturity.

How do these bonds compare with fixed deposits?

A quick look at my fixed deposit interest rates page shows me that most banks are currently offering between 7.25% to 8.00%, so the interest rates on the IDFC bonds are quite comparable.

However, and this is a big however, there are several banks that offer interest rates of 7.5% or thereabouts for lower durations like 2 or 3 years as well.

So, you could potentially be stuck with a lower interest rate if interest rates climb up in the future.

The other thing is that the IDFC Infrastructure bonds compound annually, whereas some of the bank fixed deposits might compound quarterly which gives you a slight edge as well.

How can you invest in IDFC Infrastructure Bonds?

First off, let me tell you that you can’t invest in these bonds by writing an email to me. Regular readers won’t believe the number of emails I get from people who want to invest in Tata Motors or Sriram Finance fixed deposits. I think the people who write these emails are mostly search engine visitors, so I hope at least some of them will see this.

Okay, now that we have that out of the way, you can invest in the IDFC infrastructure bonds by going through your broker like ICICI Direct or by approaching a bank that’s the authorized to sell it.

Here are the details  from the IDFC page:

To Invest in IDFC Infrastructure Bonds

Direct No. Internal Ext No.
Darshana Thanawala : 022-4342 2860 22860
Pooja Pawar : 022-4342 2887 22887
Pooja Panchal : 022-4342 2849 22849

Contact / Visit : Any of the nearest Lead Managers / Brokers ( listed below )

LEAD MANAGERS
CITIGROUP GLOBAL MARKETS INDIA PRIVATE  LTD KOTAK MAHINDRA CAPITAL COMPANY LTD
ENAM SECURITIES PRIVATE LTD IDFC CAPITAL LTD
LEAD BROKERS
Kotak Securities Ltd. Enam Securities Private Ltd
Sharekhan Ltd JM Financial Services Pvt. Ltd
ICICI Securities Ltd RR Equity Brokers ( P) Ltd
SMC Global Securities Ltd Bajaj Capital Ltd
Almondz Global Securities Ltd HDFC Securities Ltd
NJ India Invest Private Ltd
INVEST ONLINE WITH
Sharekhan Ltd ICICI Securities Ltd
HDFC Securities Ltd

Queries : For any Queries on IDFC Infrastructure Bonds
Email : [email protected]
Website : idfc.com

Call : 022 – 43422 860 / 43422 887 / 43422 849

Issue closes : October 18, 2010

As a final word, thanks to Gaurav for nudging me to write this, and please leave your comments to add any thoughts you might have.


Click here to read some more points about the IDFC Infrastructure Bonds.

Click here to read about the Coal India IPO

{ 103 comments… read them below or add one }

payal October 9, 2010 at 3:14 AM

thanks for our information

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Manshu October 9, 2010 at 3:31 AM

You’re welcome…will you be investing in these infra bonds?

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KAPUR October 9, 2010 at 11:41 PM

Which series one should invest & why..specially to get tax exemtion u/s 80D and maximum interest advantage – Series 1 & series 3?

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Manshu October 10, 2010 at 8:35 AM

To the best of my knowledge 80D is for getting tax exemption on insurance premium and doesn’t apply to interest from infrastructure bonds.

It’s the 20,000 over and above the 1 lakh that you can deduct from your taxable salary, which is the specific tax benefit from these infrastructure bonds, and the higher your tax bracket the more you gain.

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Parminder October 10, 2010 at 8:50 PM

Dear Manshu,

Its a new section 80 CCF, WHICH ALLOWS YOU TO INVEST 20 K MORE over and above your 1 lac limit .

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Manshu October 10, 2010 at 9:03 PM

That’s actually one of the first points in the post under the “Tax Saving Long Term Infrastructure Bonds” section.

The question was about 80D

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khalid October 10, 2010 at 10:45 PM

Other than IDFC, which other Infrastructure company has come out for these type of Bonds?

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Manshu October 11, 2010 at 6:08 AM

I think ICICI and IDBI had come up with these some time ago, but are not currently open for subscription.

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kavita bharti October 11, 2010 at 8:57 PM

why the copulsion of dmat account.people will be unnecessarily open dmat account and bear the hassel as well as cost

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Manshu October 12, 2010 at 2:42 AM

Not sure about the reasons for that.

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Manshu October 12, 2010 at 4:19 PM

Actually, there is no compulsion of opening a demat account, and you can subscribe to these bonds in physical form also.

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kavita bharti October 12, 2010 at 9:14 PM

the brokers are insisting that demat is compulsory

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Anuja October 11, 2010 at 10:12 PM

What is the minimum lock in period after which these will be listed?

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Manshu October 12, 2010 at 2:40 AM

After the initial lock in of 5 years, it will list in the stock exchange.

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Divyesh October 20, 2010 at 3:00 AM

Hi Manshu,
Can we trade series 1 and 2 funds as well after 5 years lock in period?
If yes, why would anyone want to go with series 3 & 4 funds?
Thanks,
Divyesh

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Manshu October 20, 2010 at 12:44 PM

Hi Divyesh,

As far as I can see they are going to be listed, but I don’t know the answer to the second part of your question, as I am not familiar with the practical dynamics of bond pricing, so maybe someone else can answer that better.

Thanks

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Amit October 21, 2010 at 4:44 AM

My take on it. They will be traded in the market and the price will be fixed by market forces, demand and supply of those bonds etc. If people want to play safe they will always go for a buy back option. Also if you have better instruments like stocks and derivatives(more volatile than bonds) why would you go for trading on bonds?

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ronak October 11, 2010 at 11:04 PM

is the interest we earn on this bonds tax free as well ???… plz reply asap as the close date is 18th n today is 12 th
thx

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Manshu October 12, 2010 at 2:39 AM

No, the interest itself is not tax free.

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George October 12, 2010 at 5:06 AM

Hi just heard some news that SBI is coming with similar infrastructure bonds with maturity of 10 & 15 yrs and with interest of 9 and 9.25 percent resp. is it true?

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Manshu October 12, 2010 at 6:12 AM

I haven’t heard or read about it….it might be true, but I’m not aware of it. Where did you hear this?

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George October 14, 2010 at 4:44 AM

Hi, Its come in todays ET about the SBI bonds opening from 18th. will it not have the benefits of the IDFC infra bond?

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Manshu October 14, 2010 at 7:47 AM

I just read about it…..they don’t have the same tax benefit as these IDFC ones. In fact, looks like they don’t have any tax benefits at all.

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Jayan October 12, 2010 at 5:34 AM

Hi, Could you please provide details about

1. For this we have to open a Demat account
How much it will come for opening this, broker fee and maintanance charges?
2. How much Tax it will come for interest of this Bond?

Is this realy worth for a 10% tax Slab person compare to FD?

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Manshu October 12, 2010 at 6:15 AM

Have you already invested the Rs.1 lakh in tax saving instruments? If you’ve not reached that upper limit then there are other avenues of saving tax, and you don’t really need to open a demat account just for this. Have you reached that limit?

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Jayan October 12, 2010 at 10:55 PM

Hi Manshu,

Yes, I have already invested RS 1 Lakh. I have one Home loan and LIC…

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Manshu October 13, 2010 at 4:17 AM

Hi Jayan, In that case you will save about an extra 2k if you invest in these funds, and the rate of interest is comparable to FDs of the same maturity.

I see that they have made some changes to allow investors to invest in physical form also, so you may not need to open a demat account just for this.

So, it’s up to you to see if the tax savings are worthwhile in your tax bracket or not for you. The other thing to consider is some other corporate could come out with a FD with a higher interest rate as well.
So, I’d consider all these things before making a decision.

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Manas October 14, 2010 at 3:33 AM

Do we need a demat account to invest in the IDFC infrastructure bond ?

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Manshu October 14, 2010 at 4:13 AM

They made some changes where now you can buy it in physical form also, so if you checked earlier and found the answer to be no, please check again.

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sanjay October 15, 2010 at 2:47 AM

i fall in tax bracket of 20% . how to calculate the yeild. Can you give illustration,

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Manshu October 15, 2010 at 6:29 AM

Let me take a shot at calculating yield by using Series 4 as an example:

Investment 5000
Reduction in taxable income: 5000
Tax @ 20.6% 1030
Net Investment 3970
Buyback amount after 5 years 7180
Compounded Annual Growth Rate 12.58%

On their page they have shown yields for various options. http://idfc.com/infrastructure_bonds.htm

This is the page I used to calculate CAGR:
/2008/10/09/cagr-calculator/

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Kunal October 15, 2010 at 2:59 AM

Hey.. thanks for these updates.. they are really helpful.
Just wanted to check if any other such bonds are to be issued in the near future ( iv heard not all firms are authorized to issue these) and also whether the int rate offered by IDFC is better than those offered by ICICI & IDBI

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Manshu October 15, 2010 at 6:21 AM

I haven’t heard of any plans yet, but that may just be because I am unaware of such issue.

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Manshu October 16, 2010 at 4:37 AM

Hey Kunal, I came to know today that L&T Finance is also coming out with such an issue which opens on Nov 4th and will have 80CCF deduction. The bonds will have 10 year tenor and the bonds with a buy back option within five years, will offer interest of 7.5 per cent, while those for seven years will give 7.75 percent per annum.

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Prasad October 15, 2010 at 4:34 AM

this is not a very good option.
if you don’t invest in this your 20K will become 14K post tax (assuming 30% bracket) and if you invest 14K in any MF for 5 years at an avg return of 8% pa you earn more than this bond since earning from a 5 year MF will be tax free. Going the MF route is less hassel, more liquid and more secure.

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Nachiket October 18, 2010 at 12:12 AM

Anyone have any reports about the L&T infrastructure bonds? http://p1n.in/tEM Thinking of investing here..

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Manshu October 18, 2010 at 12:04 PM

You can read the newly posted review on this site here: /2010/10/18/lt-infrastructure-bonds-review/

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sanjay October 19, 2010 at 3:16 AM

manshu thanks for giving the yeild calculation. Now can we get the better one L&T or IDFC?

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Manshu October 19, 2010 at 3:23 AM

You can take a look at the yield tables for both based on your tax bracket and time period on these pages, and compare them:

/2010/10/18/lt-infrastructure-bonds-review/
/2010/10/12/idfc-infrastructure-bonds-faq/

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Pawan Dhawan October 19, 2010 at 5:46 AM

Hello Dear !!!!

Can you pls suggest me the best Mutual fund for 1 and 1-1/2 year locking.

I want to invest and there may be the chances that I will have to withdraw the complete monies.

Kindly suggest.

Rgds,
PD

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Manshu October 19, 2010 at 1:11 PM

Sorry PD, but I haven’t done that research, and really don’t know about best mutual funds you could look at.

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Hemant October 19, 2010 at 10:56 AM

Hi
The article is quite informative. But I doubt whether the IDFC bonds issue is beneficial or an eyewash. Please consider my viewpoint as given below.
The 1.0 lac limit goes to 1.2 lacs. Thus the salaried person who is affected by 30% slab will get a refund of 6600 approx(he is most benefitted). Assuming that he gets this refund immediately(which may not be), and he puts the same amount of 6600 in additional purchase of IDFC bonds, I can say that for an investment of Rs 20000(actual), he is getting returns for Rs 26600(with IT benefit). These returns on Rs 26600 will count to Rs 57,427 at the end of 10 years, 8% rate (compounded). Now at the end of 10 years, we can assume that the person will still be affected by 30% slab(it may be more that time), Rs 17,228 out of these returns will have to be sacrificed for IT(it is not tax free). So the approx net return will be 57427-17228=40,199.
Now, suppose this person decides to invest these 20,000 in PPF or FD even at 8%(above 1lac so I am not counting IT benefit) he will get Rs 43,178 at the end of 10 years.
So the loss in putting money in IDFC bond is Rs 2979. The actual loss will be more than this because the Rs 6600 benefit will come after one year. The loss will be more to persons affected by 20% slab.
With this, please tell me, is it worth purchasing these bonds?

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Hemant October 19, 2010 at 11:03 AM

In my comment, in the 7th last line, for ‘PPF or FD’ read ‘PPF’.

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Manshu October 19, 2010 at 1:10 PM

From what I understand, the crux of your argument lies in comparing an instrument whose interest income is not taxed with another whose interest income is in fact taxed.

Given that, I’d think about a couple of points:

1. Has the 1 lakh limit for saving tax reached? If no, then obviously you have other options because the key selling point for these bonds is that they allow you to save “extra” tax.

2. The next question is whether in fact the PPF limit has been reached, or is there still have room to go there? If there is, then most likely the 1 lakh limit is also not reached, so probably makes more sense to exhaust that first.

I raise these two questions because everyone’s tax and investment situation is different so the things that people need to consider are different.

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Hemant October 20, 2010 at 9:28 AM

point taken. it is about saving extra tax when 1 lac limit is exhausted.

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Archit October 19, 2010 at 7:34 PM

why do you intend to repurchase IDFC bonds from the 6600 benefit??
the best way is to get tax benefit by selecting series 3.

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Amit October 19, 2010 at 11:55 PM

I think your calculation is wrong, the interest out of this investment is Rs30,827, you will only be charged tax on the interest. So your tax will be Rs9,248. So your net return will be 57427-9,248=48178.9. Please correct me if I am wrong

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Hemant October 20, 2010 at 9:34 AM

You are right Amit, I stand corrected. There will be a 5000 odd profit after 10 years if we compare both investments. Yes, there is some logic to buy these bonds keeping in mind the two questions rightly pointed out by Manshu.

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Manshu October 20, 2010 at 11:32 AM

Hemant, very impressed by your ability to acknowledge this! Appreciate your question and comments very much!

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Hemant October 21, 2010 at 3:30 AM

Thanks Manshu. For me the discussion was very educative. Thank you wood-sculpture!

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sanjay October 20, 2010 at 11:08 AM

dear manshu, really discussion are wonderful and informative thanks for such valued inputs on personal finance

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Manshu October 20, 2010 at 11:31 AM

Thanks a lot for your kind words Sanjay, and yeah this discussion has been great! Thanks for participating!

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Raj November 9, 2010 at 2:03 AM

Thank you very much Manshu.

However, i am very sad for seeing this iformation very late. I would like to take your advices for any tax saving options.
Currently, I have LIC for 40k per year as 1 tax saving option.

Please let me know your suggestions. if any new infrastructure bonds are coming up, please let me know.

Regards
Raj

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Manshu November 9, 2010 at 4:14 AM

Don’t be disheartened Raj because IDFC has said that they’re going to come up with these bonds again before the end of the fiscal year, so you have another chance of subscribing to them. They might even give a higher rate.

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sridhar November 12, 2010 at 9:13 AM

how many shares i will get in powergrid fpo as a retail investor ? i applied for 1105 shares. thank you

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SUSHMA November 15, 2010 at 2:13 AM

is there an option of getting interest for the pre allotment period

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Manshu November 15, 2010 at 9:54 AM

I don’t think they’re going to pay out interest for that time. I think the interest start from the day the security comes to your demat account Sushma. Does anyone know differently?

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subhash chandra chauhan November 15, 2010 at 7:57 PM

please given me detail my investment.
aplication no.3917897
cheque no. 575359 pnb.

yours
subhash chandra chauhan.

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Manshu November 16, 2010 at 8:08 AM

Please get in touch with whoever sold this to you Subhash.

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Palash November 16, 2010 at 12:34 AM

The article is good indeed, but I think the tax deduction from investing in the Infrastructure Bonds are U/S 80CCF.

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Manshu November 16, 2010 at 7:35 AM

Yes Palash, you’re right – the section under which these particular bonds are covered is 80 CCF, however I chose to reference 80C in the second para because that’s the one with the 1 lakh limit.

But you’re right the section for the infra bonds is 80 CCF.

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pradeep November 21, 2010 at 12:03 PM

I have taken infra bond in phsically form. I want to know that when i will get my cetificiate of bonds

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Manshu November 22, 2010 at 6:55 PM

No one has reported that they have gotten it yet, and I haven’t heard any communication on when it can be so you will have to just wait. As soon as I hear anyone getting the physical form I’ll leave a comment here.

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Manshu November 23, 2010 at 7:01 AM

Reader Ravi has left a comment today stating that he received his physical bond certificate so you can expect yours to come soon if they haven’t already.

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Heera Lal December 8, 2010 at 6:08 AM

I have taken L & T long term infra bond in physically form. I want to know that when i will get my certificate of bonds. because of this delay i am unable to show in tax saving declaration in my organization. Our organization can not consider the receipt of form submitted. So if any i idea please help me. how can i get my certificate.

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Manshu December 8, 2010 at 8:49 AM

Well, they haven’t announced that yet, so can’t say when it will come. Sorry.

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jignesh desai November 24, 2010 at 7:24 AM

Sir, I don’t understand how the yield calculation for different tax slabs has been done for the different options of this Bond . Please can you show the working in detail .

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Manshu November 24, 2010 at 9:37 AM

Here is a post that I did explaining how links are calculated Jignesh.

/2010/10/30/how-do-the-issuers-calculate-yield-for-tax-saving-bonds/

Here is another one that explains what the limitations are in calculating yields this way.

/2010/10/26/limitations-of-the-way-yields-are-calculated-for-tax-saving-bonds/comment-page-1/

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Manik Mandal December 9, 2010 at 10:27 AM

I have taken IDFC bond in phsically form. I want to know that when I will get my cetificiate of bonds so that I can inform my office for tax saving purpose.

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Manshu December 10, 2010 at 10:31 AM

You should have gotten it already Manik, so please check with your agent to see what happened. Was that credited to your Demat account yet?

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Sanjeev Sharma January 1, 2011 at 6:13 AM

I would like to know currently which are the long term infra structure bonds available under 80CCF. Pl confirm so that I can purchase immediately

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Manshu January 3, 2011 at 11:11 AM

Sanjeev a reader just left a comment, and informed that IFCI has extended their date to 12th January 2011, so if you’re interested in that one you still have time.

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Lijo Lawrance January 3, 2011 at 9:11 PM

I have applied for IDFC bonds Online (demat) but not yet received the certificates

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Amit Grover January 5, 2011 at 5:29 PM

I have applied for IFCI infrastructure bonds Online (demat) but not yet received the certificates

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Shiv January 14, 2011 at 9:11 AM

Hi

I’m an Independent Financial Advisor based in South Delhi. Currently IDFC Infra Bonds are up for subscription and closing on February 4th. I think Infra Bonds are a good investment option as they offer tax deduction u/s 80CCF on an investment of Rs. 20,000 over and above Rs. 1 lakh deduction u/s. 80C. The tenure of the bonds is actually 10 years but after 5 years of lock-in period you can either redeem the bonds back to IDFC, which is called a buyback facility, or sell these bonds on stock exchanges. The bonds carry a coupon rate of 8%.

To Invest in Infrastructure Bonds & Save Tax u/s. 80CCF, you can Call/SMS: 9811797407 (Delhi, Gurgaon & Noida only)

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Manshu January 14, 2011 at 9:36 AM

Shiv – isn’t IDFC going to open on 17th?

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Shiv January 14, 2011 at 9:46 AM

Yes it is but the forms are already there in the markets so people can start thinking on those lines as we need to get rid of the habit of doing things only on the last minute.. 🙂

& sorry if it misguides but no such intention here.. 🙂

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Manshu January 14, 2011 at 9:55 AM

Alrighty – thank you for your clarification Shiv.

In the past an adviser used to post comments asking people to subscribe to Tata Motors FD long after the FD was closed, and when I asked him, and them emailed him about it – he just ignored my message. I had to block him. Then someone was posting crappy spammy messages for subscribing to infra bonds, and I had to block her too.

I don’t want anyone getting scammed on my blog, and at the same time don’t want to block people who’re making an honest living. I hope you understand, and I’m glad you responded promptly, and I didn’t block you.

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Shiv January 14, 2011 at 10:17 AM

hehe.. sure i do understand.. & thanks for not blocking it.. actually in the last 2 weeks or so i’ve been getting many tax saving queries & as these Infra Bonds are new kids on the block, people are just flocking to these bonds on the last or second last day of their “Tax Declaration Date” or “Tax Saving Investments Proofs Submission Date” in the office. It just keeps running around my mind and even as I’m writing these lines IDFC forms & REC forms are lying on my table.. so probably that made me write those lines… 🙂

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Manshu January 14, 2011 at 10:21 AM

That’s cool – I didn’t realize REC has also declared its dates – when is that opening Shiv?

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Shiv January 14, 2011 at 10:42 AM

one more thing thats going to increase red cells in your blood.. :-).. i mean its already open & as you wrote above with the Tata Motors example, REC bonds opening date was January 12th & i think probably no single newspaper, which i regularly read, wrote about it.. chalo good hai !!.. at least closing date se pehle pata chal gaya.. :-).. waise the closing date is March 28th & REC aims to garner Rs. 50 Cr. from the public & will retain the oversubscribed portion.. its offering 8% with buyback option & 8.1% without buyback option.. but there is no cumulative interest option which is quite surprising to me.. the bonds are very well rated by four rating agencies ‘AAA/Stable’ by Crisil, ‘CARE AAA’ by CARE, ‘LAAA’ by ICRA & ‘AAA (IND)’ by Fitch…

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Manshu January 14, 2011 at 10:59 AM

Man!!! I had no idea! Thanks for letting me know!

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Shiv January 14, 2011 at 10:12 PM

arey sir dont say thanks plz… i’m throwing just a bucket of water in an ocean (i mean you.. :-))

As now even REC is issuing these bonds at 8% interest, I dont think any other IFC status company would be issuing bonds at a higher rate than these… so people expecting higher interest rates should start investing in either IDFC or REC for their tax saving..

For any information about Infra Bonds like IDFC or REC or to invest, you can contact us at 9811797407

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Arpit January 19, 2011 at 1:14 AM

As per my understanding of these bonds there are 2 differences in 5yrs and 10yrs bond-
After 5 Yrs lockin u can sell them onto stock exchange or can use buyback option and in 10 y r termu do not have such option till completion of 10yrs. And there is some difference in rate of interest offered on these two tenures.

Please correct me or add anything which i dont know.

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Manshu January 19, 2011 at 1:29 AM

I think you were looking for the details for the new tranche Arpit? This post for the older issue.

The details for the new IDFC Infra issue can be found here:

/2011/01/18/idfc-infrastructure-bonds-tranche-2/

There is a buyback option in both series, and the difference in them is that one pays annual interest, while the other pays a lump – sum.

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Arpit January 19, 2011 at 1:39 AM

Thanks a ton Manshu for ur quick response. I will go through the link given by you. I m really interested in these bonds and was looking for some information and while searching on net i came through ur site, this is really helpful in other investments aspects too. Good job… keep it up. Again thanks for providing such good info on site.

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Ankit Chaudhary January 24, 2011 at 12:23 PM

If anyone from kolkata wants to purchase IDFC Infrastructure bond then u can call me @ 9339496519 or email me at [email protected]. issue closes on 4th February.Hurry!!!

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Amit January 27, 2011 at 10:11 AM

I have applied Online through ICICI Direct but in my wife’s name, non working, am i entitled for Tax rebate?

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Manshu January 28, 2011 at 5:35 AM

I’m not a tax expert, but as far as I know, you can’t claim tax rebate on your wife’s name.

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Ankit Chaudhary January 28, 2011 at 11:05 AM

Yes….of course u can take benefit if payment is made from your account and your wife is not having a separate income tax file…….

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Manshu January 28, 2011 at 11:08 AM

Thanks for your response Ankit – can you please share the source of your info?

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Srija February 3, 2011 at 2:23 AM

Hi,

I have taken IDFC infra bonds. WHile taking them i issued a cheque but it returned due to name mistake…. what will happen like whether i will get infra bond or not…. any one can help me

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Shiv February 3, 2011 at 9:57 AM

Hi Srija.. you wont be issued any bonds.. apply for them again..

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Seeth March 11, 2011 at 10:08 AM

I have been told by one financial adviser is that it is wise to invest in MF or other bonds than Infra Bonds coz they yield only 8-9% where as MF can yield 12-15%.

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Manshu March 11, 2011 at 5:42 PM

Seeth – comparing bonds and MFs are like comparing apples and oranges – one is a debt product, another equity. If you are looking to make use of the tax benefit from these bonds then it makes sense to invest else there are other fixed deposit schemes that will yield higher and have better safety.

I think this post about differences in FDs, Infra Bonds and Infra MFs will be useful for you.

/2011/03/02/venn-bonds-collide/

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Suresh November 23, 2011 at 8:24 PM

Dear Manshu,

Can you please clarify
If the bonds are listed it may fluctuate based on market and we may or may not get the amount invested. is it true. What is the risk involved when compared to MF

Can you please advise, what is the current value (approximate) of a IDFC bond issued 5 years back..just for comparison. Value of the capital eg Rs 5000 not the interest.

Thanks

Suresh

Reply

Manshu November 23, 2011 at 9:35 PM

Dear Suresh – the fluctuation if there’s any will only affect if you sell it on the market. You always have the option to go for the buyback in which case you will get the full principal and there’s no fluctuation.

Since these type of bonds were issued only last year there is still no market for them.

Reply

Suresh November 27, 2011 at 2:39 PM

Thanks Manshu.

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Ritu Gupta November 30, 2011 at 6:36 PM

Dear Sir
I, Ritu Gupta, folio no. IDBO 104860, unable to get my documents for bonds for which i have applied in Jan, 2011, as nobody was there to take the documents.I want to change my Address from A-125, Preet vihar,Delhi -92 to C-16, East End Appartments, Mayur Vihar, Phase I Extn,
Delhi – 110096.

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Manshu November 30, 2011 at 7:34 PM

This is like a news website, please contact the agent who helped you buy this.

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subhash December 22, 2014 at 7:49 PM

MY FOLIO NO.IS IDB 0153670.I HAVE 4 UNITS OF RS.5000/-EACH.
KINDLY ADVISE ME THAT HOW CAN I SEE MY UPDATED STATEMENT OF ACCOUNTS

Reply

Madan Lal September 5, 2015 at 1:14 PM

Buyback forms not received. Please send the same.Thanks

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SAJU February 1, 2016 at 2:25 PM

I had applied for IDFC long term infrastructure tranche 2 bonds (IDB0273200) when like to know the procedure for buyback.

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