NHAI Tax free Bond

NHAI Tax Free Bond Details

S.No.	Particulars			Rate/Date
1	Rate of Interest for 10 Years Tenure			8.2% p.a. (payable annually)
2	Rate of Interest for 15 Years Tenure			8.3 % p.a. (payable annually)
3	Date of Opening of Issue			28th December 2011
4	Date of Closing of Issue			11th January 2012
5	Interest on Application Money on successful allotment			(Coupon Rate of the respective Tranche)
6	Interest on Refund			4% p.a.
7	Base Issue Size			` 5000 crore
8	Minimum Application Size			` 50000 (50 Bonds)
Particulars		Retail **	HNI		other
Size in %		30% of the base issue size	30% of the base issue size		40% of the base issue size
Size in Amount		` 1500 Crore	` 1500 Crore		` 2000 Crore

**    The allotment shall be done on a proportionate basis only for Retail category and not on first come first serve basis (FCFS). Retail application is for an amount of Rs. 5 Lakh or less.

Allotment for the other categories will be on First Come First Serve Basis

NHAI Tax Free Bond - Investment Rationale

1. Timing appropriate:10 Year G sec at 8.30% is close to the last 5-year high - right

time to start building on a long-term bond portfolio as we cannot time the entry

2. Tax-free best option: Long bonds are of 3 types – zero-coupon or interest-bearing or

tax-free – highest post tax yields & mark to market realizable on tax-free- the best option

3. Better Liquidity: Listed on NSE and BSE. With the issue size expected upto Rs. 10,000

crs the floating stock will be relatively better

4. Credit quality: AAA government PSU (autonomous authority of the GoI under the

Ministry of Road Transport and Highways )

5. Tax free interest income not affected by potential tax regulation changes

6. Lienable / Pledgeable