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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (3627)	1/31/1999 10:45:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

New Issue Monitor-Corporate Bond -IPO-->IDBI FelxiBonds 5 -------------------------------------------------------------------------------- If interested contact your broker or the issuing bank.Issue closes on Feb.16th I believe. Said to be a good retirement investment product with high yields. ====================================== (Courtesy:The CapitalMarket Interactive) IDBI FLEXIBonds 5- New multiple choices The Multi Option Bond is especially useful for those who are about to retire in the next couple of years in place of Deep-discount Bonds, IDBI has introduced a new Multi Option Bond which helps investors to postpone their income to later periods. This is especially useful for those who are about to retire in the next couple of years. An investor in this bond can select the duration of the waiting period during which no interest will be paid, though higher interest will be paid after the waiting period. A wait period of 2 years will mean no interest in the first year, but an interest at the rate of 17.5% pa for the next six years (with the first interest due on 11 Feb.2001). A wait period of 3 years means no interest for two years, but an interest at the rate of 22.5% pa for the next five years. A wait period of 4 years yields no interest in the first three years, but an interest at the rate of 30% for the next four years. ============================================================ Best for those about to retire Features of Multi Option Bond ------------------------------------------------------------ Options Wait period First Interest Coupon YTM Payment on (% pa) (%) ------------------------------------------------------------ A 2 years 11 Feb. 2001 17.50 13.93 B 3 years 11 Feb. 2002 22.50 13.88 C 4 years 11 Feb. 2003 30.00 13.80 ============================================================ Thus, the term of maturity in all the cases is seven years. YTM varies from 13.93%(for a wait period of 2 years) to 13.8% (for a wait period of 4 years). This bond is an excellent investment for those who do not need any income for the next few years and do not expect any tax liability in the later years (eg. those about to retire). However, Multi Option Bonds cannot be redeemed before maturity. Those who want to postpone their income to later years and, at the same time, want some income in the earlier years, can opt for the Growing Interest Bond. Interest rate increases from 11% for the first year to 12% for the second year, 13% for the third, 14% for the fourth, 16% for the fifth, 18% for the sixth and 20% for the seventh year. YTM is 14.09%. The original individual allottee can encash this bond any time after one year and at any of IDBI Bank's specified branches. The Tax Saving Bond is intended for those who want to avail of benefits under Sec. 88 (tax rebate of 20% of the amount invested up to Rs 10,000) of the Income Tax Act or under Secs. 54EA and 54EB (related to exemption of long-term capital gains) of the Act. ====================================================== IDBI Flexibonds 5 ------------------------------------------------------ Issue Size: Rs 750 cr, with an option to retain an additional Rs 750 cr Minimum Investment: Rs 5000 Opens/closes: 21.12.98/14.01.99 ====================================================== There are two options for the Sec. 88 bond. One option gives 12.5% annual interest.The second is a sort of deep-discounted bond which gives Rs 7,150 for an initial investment of Rs 5,000 after three years. This second option is especially useful for those who are going to retire within the next three years because the difference between the redemption value and face value will be treated as interest income in a year when the investor may not have taxable income. Further, the Regular Income Bond offers interest income at the rate of 14% pa with options for annual, half-yearly or quarterly income distribution. Though its maturity is seven years, it can be redeemed at the end of five years and in which case the YTM will be lower by 25 basis points (around 13.75%). Recently, the government reduced interest rates on post office savings schemes and Relief Bonds by 100 basis points. Interest rates of PPF and PF may also be reduced. ICICI and some banks are also considering the possibility of reducing interest rates on their bonds and deposits. Hence, IDBI's Flexibonds 5 is likely to receive a good response. Those who want to invest to take benefit of Sec. 88 (20% tax rebate up to Rs 14,000) should seize this opportunity and invest right away instead of waiting till March. Contact your broker of the issuing bank IDBI for details. Home page of IDBI Bank idbibank.com