REC Tax Free Bonds

Rural Electrification Corporation Limited (REC) has got the ROC approval for its Debt IPO Yesterday  on (27/11/2012). The  final details of the forthcoming Debt Public Issue are as follows:

Issue Size:

1.        Rs. 1000 crores with right to retain oversubscription upto the Shelf Limit (i.e. upto Rs 4,500 crores)

2.        Face value of each Bond shall be Rs. 1,000/- and the minimum application size shall be for 5 bonds and in multiples of 1 Bond thereafter

Yield Offered:

Options	Series of Bonds*
	Tranche 1 Series 1	Tranche 1 Series 2
Tenor	10 Years	15 Years
Frequency of interest payment	Annual                                                                                                      Annual
Mode of payment	Through various modes available**	Through various modes available**
Coupon rate (% p.a.) for Category I,II,III	7.22	7.38
Additional Coupon Rate*** (% p.a.) Category IV***	0.50	0.50
Aggregate Coupon Rate (% p.a.) for Category IV***	7.72	7.88
Effective yield(% p.a.) for Category I, II and III applicants	7.22	7.38
Effective yield (% p.a.) for Category IV applicants***	7.72	7.88
Coupon Type	Fixed coupon rate	Fixed coupon rate

Note:

*** In case the Bonds held by the original allottees under Category IV Portion are sold / transferred (except in case of transfer of Bonds to legal heir in the     event of death of the original allottee), the coupon rate shall stand revised to the coupon rate applicable for allottees falling under Category I, Category II and Category III Portion. 

Categories of Reservation:

1.         Category I – QIB’s                                                      :   30%

2.         Category II - Non Institutional Investors          :   15%

3.         Category III – HNI’s                                                   :  15%

4.         Category IV – Retail Individual Investors          :   40%

Issue Timing:

1.    Issue Opening Date:        December 3, 2012

2.    Issue Closing Date   :        December 10, 2012

Interest on Application Money:

1.    On application money allotted    :    @ the rate of 7.22% p.a. and 7.38% p.a. on 10 Year option and 15 Years Option respectively for allottees

    under Category I, Category II and Category III Portion, and at the rate of 7.72% p.a and 7.88% p.a. on

    10 Year option and 15 Years Option respectively for allottees under Category IV Portion

2.    On application money refunded:     @ 5% p.a.

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