PFS launches tax saving infrastructure bonds

31 Dec 2011

PTC India Financial Services (PFS), the subsidiary of PTC India (PTC), has proposed to raise Rs 50 crore with a green-shoe option to retain over-subscription for issuance of additional infrastructure bonds Series 2 (infra bonds) with benefits under section 80CCF of Income Tax Act, 1961 up to Rs 20,000 for FY 2010-11. The issue opened on December 30, 2011 and will close on February 29, 2012.

PFS is offering an interest rate of 8.93% per annum on option I and II for 10 year bond with an option for buyback after 5 years and 9.15% per annum for option III and IV for 15 year bond with buyback option available after 7 years. Option I and III investors will get interest on annual basis wherein Option II and IV investors will get cumulative interest at time of maturity with principal. The current issue has received ‘AA’ from Brickwork Ratings, ‘LA+’ from CARE and ‘LA+’ from ICRA.

Investors are eligible to avail tax benefits depending on their tax brackets under section 80CCF of Income Tax Act, 1961 for tax-saving investments, allowing for a deduction of maximum Rs 20,000 for FY 2011-12, over and above the Rs 1,00,000 deduction available under section 80C. There is no maximum limit on investment is such bonds.

PFS is issuing the bonds after being classified as an infrastructure finance company (IFC) by the Reserve Bank of India in August 2010.

PFS is an Indian non-banking finance institution promoted by PTC India, the company  offers an integrated suite of financial services with a focus on infrastructure development, including providing debt (short term and long term) financing and making principal investments in, private sector Indian companies in the power sector, including power generation, equipment supply and fuel source projects..

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