RURAL ELECTRIFICATION CORPORATION LTD TAX FREE BOND

Transcription

1 ISSUE OPENING DATE: 6 th March, 2012 ISSUE CLOSING DATE: 12 th March, 2012 ISSUER Issue Structure Issue Size Allotment RURAL ELECRTIFICATION CORPORATION (REC) -TAX FREE BOND Tax Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures Aggregating to `1,500 Crores with an option to retain over subscription upto a total amount of `3000 Crores On First Cum First Serve Basis Tenure 10 Years 15 Years Category I,II (QIB,HNI & Corp) (Coupon Rate) 7.93% 8.12% Category III (Retail )( Coupon rate) 8.13% 8.32% Interest Payment Date Payable Annually Only Credit Rating CRISIL AAA/Stable by CRISIL, CARE AAA by CARE, ICRA AAA by ICRA Face Value `1000 Minimum Application `5000 & in multiples of 1 bond thereafter Issuance Only in dematerialized mode Listing Proposed to be listed on BSE & NSE Trading Compulsorily in dematerialized Mode Interest on Refund 5% p.a.

2 WHO CAN APPLY Category I Public Financial Institution as defined in section 4A of the Companies Act, 1956 Scheduled Commercial Bank Multilateral and Bilateral Development Financial Institution State Industrial Development Corporation Insurance Company registered with the Insurance Regulatory and Development Authority Provident Fund with minimum corpus of twenty five crore rupees Pension Fund with minimum corpus of twenty five crore rupees National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India Insurance Funds set up and managed by army, navy or air force of the Union of India Insurance Funds set up and managed by the Department of Posts, India Regional Rural Banks and Co-operative Banks, eligible to invest in the Issue Companies; bodies corporate and societies registered under the applicable laws in India and authorized to invest in the Bonds; Public/private charitable/religious trusts which are authorized to invest in the Bonds; Scientific and/or industrial research organizations, which are authorized to invest in the Bonds; Mutual Funds; Partnership firms in the name of the partners; Limited liability partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009) Resident Indian Individual Category II The following investors applying for an amount aggregating to above ` 5 lakhs across all Series in each tranche Resident Indian individuals; Hindu Undivided Families through the Karta; and Non Resident Indians on repatriation as well as non-repatriation basis. Category III The following investors applying for an amount aggregating to up to and including ` 5 lakhs across all Series in each tranche Resident Indian individuals; Hindu Undivided Families through the Karta; and Non Resident Indians on repatriation as well as nonrepatriation basis.

3 Category Wise Break-up of the issue Category I Category II Category III Upto 50% of Overall Issue Size Upto 25% of Overall Issue Size Upto 25% of Overall Issue Size QIB & Corporate Individuals & HUF applying for more than `5 Lakh Individuals & HUF applying upto `5 Lakh *On first come first serve basis to be determined on the basis of date of receipt of applications duly acknowledged by the Bankers to the Issue Applications cannot be made by: a) Minors without a guardian name; b) Foreign nationals; c) Persons resident outside India including NRIs; d) Overseas Corporate Bodies e) FIIs HIGHLIGHTS OF TAX BENEFITS In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of Section 10 of the Income Tax Act, 1961 (43 of 1961) the Central Government authorizes REC to issue during the FY , Tax Free, Secured, Redeemable, Non-convertible Bonds. The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of I.T. Act, There will be no deduction of tax at source from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors. Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957

4 Documents required in REC Bonds: Applications by Public Financial Institutions, Statutory Corporations, which are authorized to invest in the Bonds The application must be accompanied by certified true copies of (ii) Any Act/Rules under which they are incorporated; (iii) Board Resolution authorising investments; (iv) (iv)specimen signature of authorized person Application by Commercial Banks, Co-operative Banks and Regional Rural Banks Commercial Banks, Co-operative banks and Regional Rural Banks can apply in this public issue based upon their own investment limits and approvals. The application must be accompanied by certified true copies of (ii) Certificate of incorporatation (iii) Board Resolution authorizing investments; (iv) Letter of Authorization. Applications by Provident Funds, Pension Funds, Superannuation Funds and Gratuity Fund, which are authorized to invest in the Bonds and National Investment Fund (ii) Certificate of incorporatation (iii) Board Resolution authorizing investments; (iv) Letter of Authorization. Application by Insurance Companies The applications must be accompanied by certified copies of (ii) Any Act/Rules under which they are incorporated; (iii) Certificate of registration issued by the Insurance Regulatory and Development Authority; (iv) Memorandum and Articles of Association (v) Power of Attorney (vi) Resolution authorising investment and containing operating instructions (vii) Specimen signatures of authorised signatories.

5 Applications by Mutual Funds The applications must be also accompanied by certified true copies of (i) Self-attested copy of the PAN card. (ii) SEBI Registration Certificate and trust deed (iii) Resolution authorising investment and containing operating instructions and (iv) Specimen signatures of authorised signatories. Companies, bodies corporate and societies registered under the applicable laws in India (ii) Certificate of incorporation (iii) Board Resolution authorising investments (iv) Specimen signature of authorized person Applications by Trusts The application must be accompanied by certified true copies of (ii) Certified copy of the registered instrument for creation of such trust, (iii) Power of Attorney, if any, in favour of one or more trustees thereof, (iv) such other documents evidencing registration thereof under applicable statutory requirements (v) Specimen signature of authorized person. Scientific and/or industrial research organizations, which are authorized to invest in the Bonds (ii) Any Act/Rules under which they are incorporated; (iii) Board Resolution authorising investments; (iv) Specimen signature of authorized person

6 Partnership firms in the name of the partners and Limited liability partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009) (ii) Partnership Deed; (iii) Any documents evidencing registration thereof under applicable statutory/regulatory requirements; (iv) Resolution authorizing investment and containing operating instructions (Resolution) (v) Specimen signature of authorized person. Applications under Power of Attorney In case of Investments made pursuant to a power of attorney by Category I investors, (ii) A certified copy of the power of attorney or the relevant resolution or authority, (iii) A certified copy of the memorandum of association and articles of association, In case of Investments made pursuant to a power of attorney by Category II and Category III investors, (ii) A certified copy of the power of attorney must be lodged along with the Application Form. (iii) Brokers having online demat account portals may also provide a facility of submitting the application forms virtually online to their account holders. Under this facility, a broker receives an online instruction through its portal from the applicant for making an application on his/her behalf. Based on such instruction, and a Power of Attorney granted by the applicant to authorize the Broker, the Broker submits an application form to the Bankers to the Issue. Application by Minors with a Guardian (i) Self Attested Copy o Pan card ( Minor ) (ii) Pan Card copy of Guardian DEEPAK PANJWANI Head (Debt) / deepak@geplcapital.com Disclaimer: This message is for the named addressees' use only. It may contain confidential, proprietary or legally privileged information. If you receive this message by error, please immediately delete it. You must not, directly or indirectly, use, disclose, distribute, print, or copy any part of this message if you are not the intended recipient. Unless otherwise stated, any commercial information given in this message does not constitute an offer to deal on any terms quoted. Any reference to the terms of executed transactions should be treated as preliminary only and subject to our formal written confirmation. The transmission and content of this cannot be guaranteed to be secure or error-free. Therefore, we cannot represent that the information in this s complete, accurate, uncorrupted, timely or free of viruses and GEPL Capital & its group of companies cannot accept any liability for s that have been altered in the course of delivery.