Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: cpt :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: articles on VAT and GST in India :: VAT RATES :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: VAT Audit :: TDS
 
 
Service Tax »
 IT infrastructure firm of GST under scrutiny for tax evasion
 GST council OKs draft law on relief to states
 GST Network gets notice for avoiding service tax
 GSTN contract may attract tax
 GST Council may discuss tax rate on gold at Udaipur meet
 Govt may rework indirect tax estimates mid-way after GST
 GST Council meeting: States allowed to tweak taxpayer division after consulting Centre
 Government may rework indirect tax maths mid-way after GST entry
 Govt may rework indirect tax mid-way after GST entry
 GST rollout will reduce disparity among states
 GST: E-tailers oppose tax laws

Rush for higher returns before rate cut: NTPC tax-free bonds oversubscribed 10 times on Day 1
September, 24th 2015

Record investor response to NTPC's tax-free bond sales indicate that there is a growing belief that interest rates are headed southward. The state-owned corporation's issue was oversubscribed more than 10 times on its opening on Wednesday, suggesting that in turbulent times, state-backed bonds are investors' best bet.

The state-owned company received Rs 4,417 crore subscription against Rs 400 crore, the core issue size excluding an option to retain oversubscription up to Rs 300 crore, mandated earlier by the government. The company is likely to close the issue on Thursday.

Three categories of investors including retail, high networth individuals and qualified institutions can invest in those bonds with 10-15-20 year maturities subject to different rates. A retail investor can earn as high as 7.36-7.53-7.62% across maturities.

"Amid an uncertain equity market, retail investors including HNIs, prefer to bet on taxfree bonds with a higher safety net," said Deepak Panjwani, head - debt markets at GEPL Capital. "Given RBI's lower interest rate trajectory, at least for the next one to two years, investors seek to gain from falling yields via secondary market."

An investor can exit through secondary market as those bonds will be listed on stock exchanges. If RBI cuts the benchmark rate going forward, yields will fall pushing prices up. Tax is not payable on the interest earned on such bonds, making them look more attractive than taxable debt instruments. For a toprated paper, a retail investor in the higher tax bracket, can earn a pre-tax return of 11.37% compared with 8.10% earned from almost similar maturity government bonds.

"This is a record oversubscription as investors were desperate to lock in at higher interest rates with tax efficiency before the benchmark rate starts falling," said Ajay Manglunia, head-fixed income at Edelweiss Securities.

"We have seen major investment interest coming from all sectors, including retail, high networth individuals."

A triple-A rated issuer can sell bonds to retail investors at a rate which is 55 basis points lower than similar maturity government bond yields, according to a circular issued on July 6 by CBDT.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions