SERI Tax Saving Infrastructure Bond – Details & Review

seri infrastructure bond 2012

If you have still not invested in Infrastructure Bond for FY 2011 – 12, you are further spoiled for choice. SERI is latest entrant offering 8.9% – 9.15% interest per annum.

The table below gives the details of the issue:

Face ValueRs. 1,000/- per bond
Minimum ApplicationRs. 1,000/- (i.e. 1 Bond)
Issue ScheduleIssue Open Date : December 31,2011

Issue Close Date : January 31, 2012

Options for Subscription1234
Frequency of Interest PaymentAnnualCumulativeAnnualCumulative
Coupon (% p.a.)8.9 % p.a. 8.9 % p.a. (Annual compounding)9.15 % p.a.9.15 % p.a. (Annual compounding)
 Maturity AmountRs. 1,000 Rs. 2,346.73 Rs. 1,000 Rs. 3,718.40
Tenor10 years10 years 15 years 15 years
Buyback optionAt the end of 5 yrs+ 1 dayAt the end of 5 yrs+ 1 dayAt the end of 5 yrs+ 1 dayAt the end of 5 yrs+ 1 day
Maturity Amount (5 Yrs Buyback)Rs. 1,000Rs. 1,531.58Rs. 1,000Rs. 1,549.54
Lock-in period5 years from the deemed date of Allotment
Issuance & TradingBonds shall be issued both in dematerialised form and physical form. However, trading allowed only in dematerialised mode after the expiry of Lock-in Period of 5 yearsWould be listed on BSE only

The returns of SERI Infrastructure Bond is comparable to REC & IFCI Infra bonds and you have an option to invest in any of the three. But still I would prefer Government backed companies – REC & IFCI given that everything else is same.

You can read about yields and other details about infrastructure bonds here.

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