X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
ICICI Bonds – A tax-saving opportunity - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Mar 15, 2001

    ICICI Bonds – A tax-saving opportunity

    Following the success of the safety bonds issue in February 2001, ICICI has decided to re-enter the market in March. Once again, the focus of the issue will be on offering investors a tax-saving instrument.

    The new issue of safety bonds will open on March 15, 2001 and is scheduled to close on March 31, 2001. This will be the seventh public offering under the umbrella prospectus approved by SEBI for 2000-2001 as per an ICICI release. ICICI’s Safety Bonds, (unsecured redeemable bonds in the nature of debentures), will aggregate Rs 4 bn with a green-shoe option to retain over-subscription of an equivalent amount.

    Unlike the previous issue, interest rates offered on these bonds are not very attractive, as interest rates on these bonds have been brought down by 50-100 basis points. This is in line with the lower interest rate regime signaled by the finance minister in the latest budget. Nevertheless, it is still an ideal instrument for investors with varying investment profiles.

    Like the earlier issues, this issue of Safety Bonds also has 5 different categories, with multiple options under each category. The minimum investment will still be Rs 5,000 per bond. The multiple options of the current issue along with different categories have been outlined below.

    • Tax Saving Bond –  The tax-saving bond offer tax benefits under Section 88 (rebate) with a yield of 20.7% to the investor under this option. The second option is deep discount bond with a yield of 18.5% to the investor. The tenures under this category are 3 years and 3 years, 4 months respectively.

    • Regular Income Bond –  The tenure for this bond is 5 years with a rate of interest of 9.5%, 9.75% and 10.0% payable monthly, half yearly and annually for the three options respectively. The yield to investor being 9.9%, 10.0% and 10.0% for the respective three options.

    • Money Multiplier Bond –  These are deep discount bonds with a yield to investor of 9.7% and 10.0% for the two options respectively. The tenure for the 1st option is 4 years, 4 months whereas under the 2nd option it is 7 years, 3 months.

    • Children Growth Bond –  This category of bonds is designed to take care of lump-sum expenditure like education and marriage requirements of children under two different options. Under the first option, the tenure is 16 years, 9 months whereas under the second option it is 21 years, 3 months. The yield to investor is 10.1% and 10.3% for the two options respectively.

    • Pension Bond –  This category has 3 options for tenures 11 years, 15 years and 18 years. The monthly pension will comprise interest and principal repayments in the form of annuity. There will however be no repayment of lump-sum principal at the time of maturity of the bond. The pension would be payable monthly after a waiting period of 1 year, 5 years and 8 years under the three options respectively, with the yield to the investor being 9.7%, 9.8% and 9.9% respectively.

    Investments in ICICI’s Safety Bonds enjoy benefits under section 88 of the IT Act giving investors a total yield of up to 20.7% per annum. Thus the safety bonds are a good tax-saving option for investors with an inclination for steady returns and a low risk appetite. Investors either retired or those who have fully invested in equity can also consider investing in it.

    Click here to download ICICI Safety Bonds

     

     

    Equitymaster requests your view! Post a comment on "ICICI Bonds – A tax-saving opportunity". Click here!

      
     

    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    MARKET STATS