Any idea on the exact dates & will it be first come first serve for retail investors too ?
No idea about dates but as per draft prospectus allotment is on first come first serve basis
Quote:
Applicants belonging to the Category IV, in the first instance, will be allocated Bonds upto [●]% of the
Overall Issue Size on first come first serve basis (determined on the basis of date of receipt of each
application duly acknowledged by the Bankers to the Issue);
Why is this "first come first serve policy" applied to such bond issues? It is such a pain to get applications submitted on the first day itself (to get a chance of allocation) - which normally is a working day. Why the difference between equity issue & bond issue ? It's a real harassment for retail investors. Most of the form collecting agents don't even have the forms on the previous day of the issue.
Not sure why things are made complicated when they can be very simple.
Why is this "first come first serve policy" applied to such bond issues? It is such a pain to get applications submitted on the first day itself (to get a chance of allocation) - which normally is a working day. Why the difference between equity issue & bond issue ? It's a real harassment for retail investors. Most of the form collecting agents don't even have the forms on the previous day of the issue.
Not sure why things are made complicated when they can be very simple.
The safest way to make sure that your application is submitted on first day is to get soft copy of the form, print it on A4 paper, fill it and submit it in the bank. This way you are not dependent on anyone else. Normally soft copy of forms are available 1-2 days before physical forms.
In 2010, I submitted my wife's application for Shriram Transport NCD on first day through Sharekhan. But Sharekhan processed the application next day. I did not get any allotment. I agree that Sharekhan compensated for my losses, but after that I never submitted online application for NCDs/Bonds.
The bonds will come with a step-down clause, according to which only the original allottee, who has subscribed under the retail category will receive the coupon of 8.30%. Once the bond is sold in the secondary market, the coupon gets reduced to 7.90% or 8.05%, as the tenure of the bond may be.
This means that the traded/market value of the bonds will be less than that of NHAI/PFC bonds because of this clause.
Once the initial selling gets over, the premium will increase. N2 is trading at a lower premium compared to N1.
I expect that to reverse and N2 to trade at a higher premium after a few days.
N2 is trading at lower premium because of REC Tax free bonds. In REC Interest difference is 0.3% between 10 and 15 years. 7.85% for 10 years and 8.15% for 15 years. Plus .20% extra for retail investor.
So REC 15 year is giving better return than IRFC but 10 year is giving much lower than IRFC.
N2 is trading at lower premium because of REC Tax free bonds. In REC Interest difference is 0.3% between 10 and 15 years. 7.85% for 10 years and 8.15% for 15 years. Plus .20% extra for retail investor.
So REC 15 year is giving better return than IRFC but 10 year is giving much lower than IRFC.
I am confused. I understand that the REC bonds are opening on Mar 5 ( as per some newspaper reports )and the interest rates are yet to be announced.
I am already holding 300 bonds of 15 years. As I am original allottee, I will get 8.3% interest.
Now I want to buy more with intention to sell it if price is favorable. Say I buy 200 bonds. I assume I will get 8.3% for 300 bonds and 8.1% for 200 bonds. Am I correct?
If I sell 200 bonds after a year, which one will be sold first? Is there any way, I can sell 8.1% bonds first?
I am already holding 300 bonds of 15 years. As I am original allottee, I will get 8.3% interest.
Now I want to buy more with intention to sell it if price is favorable. Say I buy 200 bonds. I assume I will get 8.3% for 300 bonds and 8.1% for 200 bonds. Am I correct?
If I sell 200 bonds after a year, which one will be sold first? Is there any way, I can sell 8.1% bonds first?
There is no response for this query. Is it such a stupid query?
A lot more N2 bonds have been sold compared to N1 bonds - 40 times.
In case of NHAI's bonds, the number is just 4.65 times (the number of N2 bonds that have been sold till now is just 4.65 times the number of N1 bonds sold).
N2 series hit a low of 1002.40 today. Why is N2 trading so low compared to N1? It should be trading higher?
Will N2 start trading at a discount after a few days going by the trend?
I think the reason may be people are switching from IRFC to REC. Also with NHAI good listing, many people apply in IRFC for listing gains. I think when the price will stabilize after few months N2 will trade higher than N1.
Indian Railways Finance Corporation Tax-Free Bonds - January 2012
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