Tax Saving Bonds by L&T Infrastructure Finance Co.

Dear Investor,

 

We are pleased to present you the details of public issue of bonds by L&T Infrastructure Finance Company. Investment upto a maximum of Rs.20,000 in these bonds is eligible for deduction u/s 80CCF of the Income Tax Act for the Financial Year 2010-11. An Individual or HUF can avail of this benefit in addition to the limit of Rs.1 Lakh u/s 80C.  

Company Profile: 

L&T Infrastructure Finance Company Limited, a 100% subsidiary of Larsen & Toubro Limited, was incorporated in 2006, and is registered with the RBI as a systemically important non deposit taking NBFC and classified as an IFC. The company's business comprises the provision of financial products and services for customers engaged in infrastructure development, construction and operations & maintenance with a focus on the power, roads, telecommunications, oil and gas and ports sectors in India. The company is registered with the RBI as an Infrastructure Finance Company, or "IFC", which allows it to optimize its capital structure by diversifying its borrowings and accessing long-term funding resources, thereby expanding its financing operations while maintaining its competitive cost of funds. The total income of the company for Fiscal Year 2010 was Rs.4,504.23 million. The total loans and advances outstanding of the Company as at March 31, 2010 were Rs. 42,884.99 million and total disbursements for Fiscal Year 2010 were Rs.37,955.14 million. 

Salient Features of the Issue: 

 

• Public issue of bonds by an infrastructure finance company under Sec 80 CCF

 

• The bonds are rated CARE AA+ by CARE and LAA+ by ICRA

 

• These bonds will be issued only to Resident Indian Individuals (Major) and HUF

 

• The bonds are fully secured with exclusive first charge on specific receivables of the Company

 

• The Bonds bear an attractive combination of coupon rate ranging between 7.50% and 7.75% p.a. coupled with tax benefits of upto Rs 20,000 under

      Sec 80 CCF

 

• The bonds will be issued in Physical or Demat Form at the option of investors

 

• No TDS applicable on bonds issued in Demat form.

 

• The bonds will be listed on NSE and can be traded after the 5 year lock-in period

 

• The bonds have a face value of Rs.5000 each and the minimum application is 5 bonds

Issue Profile:

 

 

The issue closes for subscription on November 02, 2010. Kindly communicate your request for details and application forms by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm 

Regards,

 Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd#

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

 

SIP in Equity Funds - the road to wealth

Dear Investor,

 

Have the domestic markets peaked? Are we set to witness the benchmark indices scale new heights soon? Is a correction in the offing? These are some of the questions haunting the investor community for quite some time now. Such questions appear to be quite straight forward and simple but unfortunately, the answers are not. This is primarily because we have had a massive rally in equity markets since the lows tested in March 2009 on the back of robust FII inflows which have crossed $20 bn in 2010. In such a scenario, what are the options available to small and conservative investors? Do they have to completely avoid equity markets now? Left with few options, do they only have to rely upon fixed income products? Well, the answer is a resounding NO.  Investors do have an option to reap the huge potential of equities while assuming limited risk and thereby enjoying optimal returns. This can be conveniently achieved through the Systematic Investment Plan (SIP) route offered by the mutual funds 

Illustration of the benefits of SIP in few top mutual fund schemes: 

The following table clearly shows how investments through SIP (say Rs.5000 every month) have outperformed one time investments from Jan 2008 to Oct 2010 – the period over which the domestic equity markets virtually completed a cycle of rise and fall. We have considered few schemes (growth option) with a consistent track record of performance under large, mid, diversified, tax planning and sectoral equity categories. The list is merely indicative and not exhaustive.

 

SCHEME NAME	CURRENT NAV	TOTAL UNITS	TOTAL AMOUNT	PRESENT VALUE	YIELD (%)	PROFIT   (SIP)	PROFIT        (ONE TIME INVESTMENT)
Canara Robeco Equity Diversified	58.96	4,669.03	170,000	275,286.09	38.37	105,286.09	29,268.39
ICICI Prudential Taxplan	152.58	1,896.60	170,000	289,383.74	42.76	119,383.74	32,566.18
Reliance Banking Fund	117.14	2,961.13	170,000	346,866.89	59.38	176,866.89	120,077.20
S&P Nifty	6,135.85	39.47	170,000	242,173.43	27.49	72,173.43	-582.43

                                                                                                                                                                                                            Source: MFI Explorer

Please contact us for more details on the benefits of SIP and suggestions for other equity schemes which can be considered. You can also reach us by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm.  

Regards, 

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

UTI Monthly income scheme MIS Advantage

---------- Forwarded message ----------
From: Sprism News Flash <advisory@sprisminvest.com>
Date: Sat, Oct 16, 2010 at 11:12 AM
Subject: UTI MIS Advantage
To: NIXON JOHN RODRIGUES <nixonrodrigues@yahoo.com>

Dear NIXON JOHN RODRIGUES,

 

We are pleased to provide you an opportunity to invest in UTI MIS Advantage Fund – a monthly income scheme from UTI Mutual Fund. Considering the volatile nature of equity markets and the modest returns generated by traditional fixed income instruments, a MIP scheme which combines the best of both the worlds is a 'must-have' in every investor's portfolio.

 

The special features of UTI MIS Advantage Fund are as follows:

 

• Consistent Performance: The Monthly Income Schemes of UTI have been extremely consistent with superior risk-adjusted returns – while UTI MIP has never gone below 2nd quartile amongst its peer group during any quarter in the last 2 years, UTI MIS Advantage has been equally consistent

• Constant Rate of Dividend: UTI is the only fund-house to have given predictable and almost constant rate of dividend every month. Also the Monthly Income Schemes of UTI have declared dividends uninterruptedly every month since the last 5 years

• Sticking to mandate: UTI has stuck to its mandate by managing funds with capital preservation and predictability in income distribution as the two most important parameters – UTI's commitment to the fundamental philosophy of Monthly Income Schemes has not changed through the good, bad or ugly times

• Flexibility to investors – UTI MIS Advantage in particular has several options catering to the individual needs of the investors:

                         a. Monthly Dividend Option for an investor needing monthly income

                         b. Monthly Payment Plan for investors who do not want DDT to be deducted but want a monthly stream of income

                         c. Flexi -Dividend Option for investors seeking dividends from time to time

                         d. Growth Option for investors seeking cumulative growth by way of capital appreciation

 

Kindly refer to the enclosed attachment for more details on the fund. Please communicate your request for application forms by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm    

Regards,

 Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

Coal India IPO opening on Oct 18

 

India's largest coal producing company Coal India (CIL) will open its initial public offering (IPO) for subscription on October 18, 2010. The company is offering 63.16 crore equity shares through the issue, which was an offer for sale by the President of India, acting through the Ministry of Coal, Government of India. The price band for one of the most eagerly awaited public issues has been fixed at Rs.225-245 a share and employees of Coal India and retail investors will get 5% discount to the issue price.

The offer shall constitute 10% of the post offer paid-up equity share capital of company. The government expects to raise over Rs 15,000 crore through the IPO, which will be largest ever amount raised by an Indian company via offering. The issue will close on October 21.

About Coal India Ltd:

Coal India Limited (CIL) - a Schedule 'A' 'Navratna' Public Sector Undertaking under Ministry of Coal, Government of India, has its Headquarters in Kolkata. It produces coking and non-coking coal of various grades for diverse applications

As of March 31, 2010, the company operated 471 mines in 21 major coalfields across eight states in India, including 163 open cast mines, 273 underground mines and 35 mixed mines (includes both open cast and underground mines). It also operated 17 coal beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million tons per annum. Coal India's major consumers are the power and steel sectors. Others include cement, fertilizers, brick kilns etc

As per draft prospectus, CIL is the largest coal producing company in the world (Source: CRISIL Research), based on raw coal production of 431.26 million tons in fiscal 2010. It is also the largest coal reserve holder in the world (Source: CRISIL Research) based on reserve base as of April 1, 2010.

 

Company Financials (Consolidated):

Amount (Rs. Million)	2009-10	2008-09	2007-08	2006-07	2005-06
Total Income	5,25,922.92	4,60,640.65	3,86,166.97	3,50,054.07	3,40,087.99
PAT (Restated)	98,294.09	40,628.05	42,850.07	42,052.69	61,136.01

 Our Views:

In the next four years we expect demand for coal to increase by 11% on grounds of thermal power plants being set up in country. Coal India Limited has low cost competition advantage in industry with dominant position as it owns 48% of India's proven reserves and contributes over 81% of the total coal production in India. Given India's abundant coal reserves and the absence of other sustainable fuel sources, the company plays a strategic role in meeting countries energy requirements. The company enjoys strong financials & fundamentals. With the ever rising demand for power, we expect the company to have an impressive ROE and generate substantial free cash flows. Therefore, we recommend our investors to SUBSCRIBE to this IPO.

 

IPO DISCLAMIER:

 This article has been prepared solely for information purpose and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, investors are advised to satisfy themselves before making any investments. Sprism Investment Services Private Limited does not bear any responsibility for the authentication of the information contained in the reports and consequently, is not liable for any decisions taken based on the same.  Sprism Investment Services Private Limited only seeks to provide information updates and analysis.   

 

Regards, 

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

SBI bond issue.

 

State Bank of India will raise up to Rs. 10 billion by selling lower tier-II retail bonds maturing in 10 and 15 years, an official of SBI Capital Markets Ltd told TickerNews Service on Friday.

SBI has reserved 50% of the bonds for retail investors, 25% for high networth individuals and 25% for qualified institutional buyers.

The state-owned bank is offering annual coupon of 9.25% on the 10-year retail bonds that have a call option at the end of fifth year, the official said.

The 15-year retail bonds having a call option at the end of 10th year, carry an annual coupon of 9.50%.
The official said the coupon on retail bonds would be raised by 50 basis points if the call option is not exercised.

SAVE TAX !! IDFC >> Long-term Infra Bond..

PUBLIC ISSUE OF UNSECURED REDEEMABLE NON CONVERTIBLE BONDS

UNDER SECTION 80CCF OF THE INCOME TAX ACT, 1961

FOR LONG TERM INFRASTRUCTURE BONDS

 

As you may be aware that in the last budget our Finance Minister has introduced a new IT Section 80CCF under which taxpayers can avail addition deduction of Rs.20,000/- by investing in long term Infrastructure Bonds. This investment is over and above the Rs. 1 lac permissible tax saving investment under section 80C.

IDFC Ltd  is coming up with an Infrastructure bond issue of Rs 3,400 cr in one or more tranches.  Issue is opening on September 30, 2010 and opening on October 18,2010. Find below the salient features and issue structure.

·         First public issue of bonds by an infrastructure finance company under Sec 80 CCF

·         Credit rating agency ICRA has rated the Bonds under this offer as "LAAA" with stable outlook, indicating highest safety.

·         These bonds will be issued only to Resident Indian Individuals (Major) and HUF.

·         The bonds are fully secured with first floating pari pasu charge over certain receivables of the Company and first fixed pari pasu charge over specified immovable properties of the Company. The security cover is 1.0 times of the outstanding Bonds at any point in time.

·         The Bonds bear an attractive combination of coupon rate ranging between 7.5% and 8% p.a coupled with tax benefits of upto Rs 20,000 under Sec 80 CCF.

·         There are 4 investment options, suiting the needs of different categories of investors.

·         No TDS shall be deducted.

·         The bonds will be listed on NSE & BSE and can be traded after the 5 year lock – in period.

·         Investors can mortgage or pledge these bonds to avail loans after the lock-in period.

·         Under Section 80 CCF of the I.T. Act, an investor in such infrastructure bonds will be entitled to tax deduction of investments of up to Rs 20,000. The deduction is over and above the Rs 1,00,000 deduction available under section 80C, 80CCC & 80CCD read with section 80CCE.

 

 

Series	I	II	III	IV
Frequency of Interest Payment	Annual	Cumulative	Annual (Buy Back)	Cumulative (Buy Back)
Face Value	5000	5000	5000	5000
Minimum Application	10000	10000	10000	10000
In Multiples of	5000	5000	5000	5000
Buy Back Option	No	No	Yes	Yes
Interest Payment	Yearly	Cumulative	Yearly	Cumulative
Interest Rate	8.00% Per Annum	8.00% to be compounded Annually	7.50% Per Annum	7.50% to be compounded Annually
Yield on Maturity	8.00%	Compounded Annualy	7.50%	Compounded Annualy
Buy Back Date	NA	NA	Date falling five years and one day from the Deemed Date of Allotment	Date falling five years and one day from the Deemed Date of Allotment
Buy Back Amount	NA	NA	At par with accured interest	At par with accured interest from the Deemed Date of Allotment
Maturity Date	10 Years from the Deemed Date of Allotment	10 Years from the Deemed Date of Allotment	10 Years from the Deemed Date of Allotment	10 Years from the Deemed Date of Allotment
Maturity Amount	At par plus accured interest	At par plus accured interest calculated from the Deemed Date of Allotment	At par plus accured interest	At par plus accured interest calculated from the Deemed Date of Allotment

 

 

Cheque in the favour of: "IDFC Infra Bonds" through "Account Payee" crossed cheque only.

 

Please let me know the number of forms you all would be in need of….

 

For more details, Pls visit our near Branch

or call # +91 99822 54000   or   mail @ deepaksrspl@gmail.com

 

Regards,

Research Department

 

 

Income Tax Slabs Budget 2010 -11

Good News

• Direct tax slabs: income upto 1.6 lakh = nil,
• 1.6-5 lakh = 10%,
•  5-8 lakh = 20%,
• above 8 lakh = 30%
• Old tax slabs
• income upto 1.6 lakh = nil,
• 1.6 - 3 lakhs = 10 %
• 3-5 lakh = 20 %
• 5 lakh above = 30 %
• 
  If your income more than 8,00,000 you will save around Rs. 50,000 PA ( Monthly  Rs. 4200 )
• 
  Saving
   If your income Upto 5 lakh income - 200000* 10/100 = 20000 PA
  
  Saving
  upto 8 lakh income - 500000* 10/100 = 50000
  
  
  
  Other Budget Highlights
  
  
  Direct Tax Code (DTC) and GST to be implemented w.e.f. April 1, 2011
   
  Disinvestment target for FY10 – INR 250 bn; target for FY11 higher
   
  Status paper in 6 months on public debt
   
  Proceeds from disinvestment to fund capex for social development
   
  More friendly FDI policy – no timeline
   
  Kirit Parikh Committee recommendation to be discussed separately in due course
   
  Fresh banking licenses to new players and NBFCs to be issued
   
  2% interest subvention to export credit extended for 1 year
   
  Farm loan repayment extended by 6 months till June 2010
   
  To provide 2% loan subsidy to agriculture
   
  FY11 capital for PSU banks INR 165 bn
   
  INR 1.73 tn for infra development; Power sector plan allocation doubled
   
  Allocation for power sector increased from 2320 cr, in FY10 to  5130 cr in 2011. Neutral
   
  To hike allotment in Renewable Energy by 61%
   
  Allocation for road sector increased from Rs.17600 Cr to Rs.19894 Cr – an increase of 13%.
   
  National Clean Energy Fund to be established to fund R&D in clean energy. Details on this to follow.
   
  Proposal to set up Coal Regulatory Authority
   
  NREGA allocation ~INR 400 bn in FY11 (same as ~INR 391 bn in FY10)
   
  Most social sector schemes announced so far (eg., urban housing, school education, rural health) got only a moderate increase in allocations (~10%-15%)
  FY13 Fiscal Deficit Pegged at 4.1%
   
  FY12 Fiscal Deficit Pegged at 4.8%
   
  FY11 Fiscal Deficit pegged at 5.5%
   
  FY10 GFD/GDP ratio 6.9% (revised estimate; including off-balance sheet items)
   
  UID project gets INR 19 bn
   
  Road development allocation INR 199 bn
   
  Defence expenditure up to ~INR 160 bn from ~INR 141 bn
   
  Net market borrowing target for FY11: INR 3.45 tn
   
  Income tax slabs modified – more relief for tax payers; infra bonds investments upto INR 20,000 to offer additional tax savings for tax payers
   
  MAT rate increased from 15% to 18%
   
  Tax Exemption of Rs.20,000 for investment in long term bonds – positive for the infra scetor