BRITANNIA-N3 Bonus Shares

[nmuthu]

Today BRITANNIA bonus shares are showing in Kite with Script Name as BRITANNIA-N3. The LTP is Rs.29.26.
But the share price of Britannia is around Rs.3443. can you please help me understand why the bonus shares are trading at a very low cost?

[ShubhS9]

These are not bonus shares. These are bonus debentures issued by Britannia.

This post explains about bonus debentures in detail: An introduction to bonus debentures

[MKDan]

What is the coupon rate? When does the interest gets credited to the bank account? What are the total years of the bond (maturity)?

[ShubhS9]

@MKDan

What is the coupon rate? When does the interest gets credited to the bank account? What are the total years of the bond (maturity)?

Explained here:

NCD in holding not visible

Maybe @Siva might know why this happens I also found that the primary issuance date for the Britannia NCD is 7th June 2021. I found this data from NSE and the NSDL website (linked to the archived version of those pages). Primary Issuance Data for 07-Jun-2021 ISIN Security Description Issue Size (Rs in Cr) Issue Price Issue/ Allotment Date Interest Payment Frequency First Interest Payment Date Maturity Date Put Option Description Call Option Description Credit Rating Agency Credit Rating D…

[nmuthu]

Thank you for the Response. one more quick question, if I buy these debentures, Still the 8% interest is applicable for newly bought shares or it is applicable only for Britannia debentures shares.

[ShubhS9]

@nmuthu

if I buy these debentures, Still the 8% interest is applicable for newly bought shares or it is applicable only for Britannia debentures shares.

You’ll be eligible to receive the 8% interest if you buy debentures from secondary market.

[gsecgsec]

Hi @ShubhS9

I have few questions.

1. Can i buy the debuntures from open market even if i am not a Britannia share holder ?
2. is the interest paid to my bank a/c directly ?
3. how is the taxation on returns ?
4. is the returns are pro-rated ? (if i hold for 6 months and sell it, will i get 6 months worth of interest at the end of the year?)

[ShubhS9]

@gsecgsec

Can i buy the debuntures from open market even if i am not a Britannia share holder

Yes, you can.

@gsecgsec

is the interest paid to my bank a/c directly

Yes, the interest payment frequency in annual and will be paid directly to your primary bank account.

@gsecgsec

how is the taxation on returns ?

You can learn all about taxation on bonds and debentures here.

@gsecgsec

is the returns are pro-rated ? (if i hold for 6 months and sell it, will i get 6 months worth of interest at the end of the year?)

Bonds in secondary market are traded at dirty price, this will include the accrued interest for your holding period. You can refer to this chapter on Varsity for more information.

[bharatmeka]

That is right. They are bonus debentures. @shubhS9 the link you have shared is quite informative.

[Shivam_Gupta1]

@ShubhS9 I have 1 Bonus Britannia N3 in DEMAT. LTP is showing 29.0 INR.
How much interest I will get if I hold it up to or more than one year?