Tuesday, January 31, 2012

Commodity research recommendations Jan 31st 2012


Exchange
Commodity
Contract
LTP
S2
S1
Pivot
R1
R2
Trend
MCX
Gold
Feb
28075
27824
28053
28073
28302
28322
Up
MCX
Silver
Mar
56970
56260
56815
56980
57535
57700
Mixed
MCX
Crude oil
Feb
4940
4940
4940
4940
4940
4940
Mixed
MCX
Natural Gas
Feb
138.20
133.13
135.67
138.63
141.17
144.13
Down
MCX
Copper
Feb
421.20
414.73
417.97
421.53
424.77
428.33
Mixed
MCX
Nickel
Jan
1055.60
1044
1050
1057
1063
1071
Mixed
MCX
Zinc
Jan
104.35
101.92
103.13
104.02
105.23
106.12
Mixed
MCX
Lead
Jan
111.35
108.65
110.00
111.05
112.40
113.75
Mixed




Exchange
Commodity
Contract
LTP
S2
S1
Pivot
R1
R2
Trend
NCDEX
Chana
Feb
3117
3052
3084
3104
3136
3156
Down
NCDEX
Guar seed
Feb
11702
11193
11447
11821
12075
12449
Down
NCDEX
Pepper
Feb
29960
29500
29730
30190
30420
30880
Down
NCDEX
Jeera
Feb
14448
13929
14189
14599
14859
15118
Down
NCDEX
Turmeric
Feb
4570
4579
4617
4579
4617
4579
Down
NCDEX
Chilli
Feb
6024
6037
6105
6037
6105
6024
Down
NCDEX
Soybean
Feb
2463
2403
2433
2466
2496
2529
Down
NCDEX
Soy oil
Feb
689
681
685
690
695
700
Down
NCDEX
RM seed
Feb
3310
3257
3284
3316
3343
3375
Down
NCDEX
Sugar
Feb
2863
2861
2869
2861
2869
2861
Down
NCDEX
Cocudakl
Feb
1298
1263
1281
1295
1313
1327
Down

Intraday picks
Commodity
Contract
Recommendation
Gold Mini
Feb MCX
Buy at 27980-27950 TP 28200 SL 27850
Copper
Feb MCX
Sell at 424-424.50 TP 420 SL 426.70
Crude oil
Feb MCX
Sell at 4995-5000 TP 4940 SL 5031
Soybean  
Feb MCX
Sell at 2475-2480 TP 2430 SL 2501
Jeera
Feb NCDEX
Sell at  14750-780 TP 14200 SL 14880

Monday, January 30, 2012

Tax Free Secured Non-Convertible Bonds by IRFC Ltd


Public Issue of Tax Free Secured Non-Convertible Bonds by IRFC Ltd

Brief Introduction of the company:

  • Financing arm of the Indian Railways, notified as a Public Financial Institution under Section 4A of the Companies Act, 1956.
  • Registered as a NBFC-ND-IFC (Infrastructure Finance Company) with Reserve Bank of India. 100% shareholding held by Government of India. Consistently, profit making Public Sector Undertaking. Consistently rated ‘AAA’ by CRISIL, ICRA and CARE  Impeccable track record of funding rolling stock asset creation worth Rs. 60,163 crore (5,060 locomotives, 32,115 passenger coaches and 1,39,659 freight cars) for Indian Railways so far, besides providing funding support of Rs. 2,294 crore to other Railway entities such as Rail Vikas Nigam Ltd., Rail Tel Corporation of India Ltd. Etc
  • Networth as on September 30, 2011 is Rs 4487.49 crores. Net Profit after Tax as on September 30, 2011 is 201.52 crores and it stood at Rs.485.20 crores for year ended March 31, 2011 compared to Rs 442.69 crore in March 31, 2010.

Strengths

  • Assured net interest margin:  The Company’s cost plus based lease agreement with the MoR (Ministry of Railways) ensures a net interest margin. The Company enjoys a strategically important position in the Indian railway sector:  The Company is wholly owned by the Government of India. The Company is a public financial institution and a non-banking financial company providing fund based support for the development of the Indian Railways.
  • Consistent track record of not having any non performing assets:  As of September 30, 2011, IRFC do not have any non performing assets. All its loans and receivables accrue from the MoR and other related entities like RVNL, Pipavav Railway and RailTel.
  • Consistent financial performance: The Company has demonstrated consistent growth in its profitability. In addition, the Company has low establishment, overhead and administrative expenses and the Company’s operational efficiency is high, which results in increased profitability.
  • Low cost of borrowings:  The Company’s costs of incremental borrowings were 7.62%, 7.70% and 8.98% in FY 2011, FY 2010 and FY 2009 respectively, which are relatively low with its peer group. 

Issue details:

Issuer
 Indian Railway Finance Corporation Limited
Issue of Bonds
 Secured, Redeemable, Non-Convertible bonds in the nature of debentures, having benefits under section 10(15)(iv)(h) of the Income Tax Act, 1961

 Issue Size Rs. 3,000 crores with an option to retain oversubscription up to Rs.6,300 crores (Shelf-limit)
Issue Open Date
 27th January, 2012
Issue Closing Date
 10th February, 2012
Face Value
 Rs.1,000 per Bond
Minimum Application
 Rs. 10000 (10 Bonds) & in multiples of ` 5000 (5 Bonds)
Tenor/Redemption Date
 10 Years and 15 Years from the deemed date of allotment
Ratings
 “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE & “ICRA AAA” by ICRA
Security
 Charge on the movable assets comprising of rolling stock such as wagons, locomotives and coaches by way of first/ pari passu charge, present and future, as may be agreed between IRFC and the Trustee, pursuant to the terms of the Debenture Trust Deed
Trading
  Compulsorily in dematerialized form
Issuance
 In dematerialized form as well as physical form, at the option of Applicants.
Lead Managers
 A. K. Capital Services Ltd., SBI Capital Markets Ltd. & ICICI Securities Ltd.
Depository
 National Securities Depository Ltd. and Central Depository Services (India) Ltd
Trustee
 Indian Bank
Allocation
 Category I (QIB+ Corporate)- up to 45%; Category II (Individual above 5 Lakhs)- up to 25%; Category III (Individual below 5 Lakhs)- up to 30%
Listing
 Proposed to be listed on BSE & NSE
Interest on Application Money used towards allotment of bonds
 @ 8.00% p.a. on the amount for which Bonds are allotted to the Applicants subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of banking of the application (being the date of submission of each application as duly acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment
Interest on Application Money which is liable to be refunded
 @ 4.00% p.a. on application money that is liable to be refunded to the Applicants in accordance with the provisions of the SEBI Debt Regulations, or other applicable statutory and/or regulatory requirements, subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of receipt of the application (being the date of presentation of each application as acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment. Provided that IRFC shall not be liable to pay any interest on monies liable to be refunded in case of (a) invalid applications or applications liable to be rejected, and/or (b) applications which are withdrawn by the applicant.PF / PIN / 28122011 / 770

Highlights of Tax Benefits

·         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 IT Act.
·         There will be no deduction of tax at source from the interest, which accrues to the bondholders on these bonds irrespective of the amount of the interest or the status of the investors.
·         Wealth Tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.

The issue

Options
 I
 II
Tenor
 10 Years
 15 Years
Face Value(Rs./Bond)
 1,000.00
 1,000.00
Minimum Application Size
10000 or 10 Bonds
 10000 or 10 Bonds
In Multiples of
 5000 or 5 Bonds
 5000 or 5 Bonds
Coupon Rate (%)p.a.


Retail (Category III)
 8.15%*
 8.30%*
Others (Category I & II)
 8.00%
 8.10%
Interest Payment
 Annually
 Annually
Interest Payment Date
 October 15, every year
 October 15, every year
Redemption Date
 10 Years from the Deemed Date of Allotment
 15 Years from the Deemed Date of Allotment
Maturity Amount
Face Value + Interest Accrued at the Redemption Date
Face Value + Interest Accrued at the Redemption Date
*The coupon rates of 8.15% p.a. and 8.30% p.a. shall be payable only to the original allottees under Category III for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively and shall not be payable to the transferees in case the Bonds are transferred or sold by the original allottee. In such case, the transferees shall be entitled to receive coupon rates of 8.00% p.a. and 8.10% p.a. for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively. However, in case of any transfer by a permanently disabled allottee to their legal heir(s), the transferee shall continue to be entitled to receive interest at the coupon rate of 8.15% p.a. and 8.30% p.a., for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively. Where the Bonds are held in joint names and subsequently there is a change in the sequence of the names of the joint holders, the joint holders subsequent to such change in sequence of names, will be entitled to receive the interest at the coupon rate of 8.00% p.a. and 8.10% p.a., for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively. However, in case of change in name of any of the joint holders, such joint holders shall continue to be entitled to receive interest at the coupon rate of 8.15% p.a. and 8.30% p.a., for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively. In case of transmission of the Bond(s) in accordance with the Articles of Association of the Company, to the nominee in the event of demise of the Bondholder (single or joint holders) who was originally allotted Bonds under Category III, the new Bondholder (single or joint holders) shall continue to be entitled to receive interest at the coupon rate of 8.15% p.a. and 8.30% p.a., for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively. For the purpose of classifying the investors into various categories, the applications will be consolidated on the basis of PAN. Consequent to such consolidation of applications, if an Applicant falls in any category other than Category III, such Applicant will not be entitled to receive the coupon rate of 8.15% p.a. and 8.30% p.a for Tranche 1 Series I Bonds and Tranche 1 Series II Bonds respectively

^ The Company shall allocate and allot Bond Series bearing longest maturity to all valid applications, wherein the Applicants have not indicated their choice of the relevant Bond Series in their Application Form.

Who Can Apply?

Category I:          QIB and Corporates
Category II:         Resident Indian individuals; Hindu Undivided Families through the Karta
Non Resident Indians on repatriation as well as non-repatriation basis (Above Rs.5 Lakhs)

Category III:       Resident Indian individuals; Hindu Undivided Families through the Karta
Non Resident Indians on repatriation as well as non-repatriation basis (Up to Rs.5 Lakhs)

How to Pay?

Cheque/DD’s to be Crossed A/C payee & drawn in favour of:
·         For Non NRI’s “IRFC Tax Free Bonds – Escrow Account – Tranche I”
·         For NRI’s "IRFC Tax Free Bonds – NRI Escrow Account – Tranche I"
·         For FII’s "IRFC Tax Free Bonds – FII Escrow Account – Tranche I"
IMPORTANT: Please read the Prospectus of this issue carefully before investing in the same.

Disclaimer: This note is for information purpose only and hence request you to read the prospectus for correct and accurate information before investing.