Debenture certificate long term infrastructure bonds 2011b series

General
1

Hello,
I have found a certificate of my mother holding 20 parts of face value 1000. And we are not sure what to do with it? I know this much only that physical share needs to be converted into a dematerialized format. But I am not sure whether it’s a share certificate only cause it is mentioned debenture certificate long term infrastructure bonds 2011b series. It’s of l&t infrastructure finance company Ltd. Please guide me on what to do with them.

2

Hi,

As per the prospectus (Page 39) filed by L&T Infrastructure Finance, the mentioned security is an infrastructure bond carrying interest at the rate of 9% p.a. - interest payable annually for Series 1 and cumulative [payable at maturity] for Series 2. The proceeds payable at maturity are Rs. 1,000 per unit and Rs. 2,367.36 per unit for Series 1 and 2 respectively.

The maturity period of the bond is 10 years, which puts the maturity date at 10-Jan-2022 (as per the letter of offer for buyback filed by the company). The bondholders had the option to sell the bonds back to the company through the buyback offers held during 2016 and 2018.

Now, you can either hold the bonds till the maturity date (or) sell the bonds on the exchange [if the bonds are held in dematerialised form].

The company’s website has mentioned the contact details of the Registrar and Transfer Agent (Link Intime India Pvt. Ltd.). You can contact the RTA for queries in relation to dematerialisation of bonds / updating of KYC etc.,

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3

Hi first of all thank you so much for replying. It’s in physical form. As buyback period is over. I have two options now trade them in the secondary market or redeem them at maturity. As it is a 2011b series 2 bond its value at maturity is 2367 rupees. And it’s mentioned yield on maturity 9 % compounded annually. So which option will be more beneficial to trade them at the secondary market or redeem them at maturity?

4

Though this would be up to you to decide, what I can say is that, you can either receive approx. Rs. 2,250 (Current Market Price of the bond) today (or) Rs. 2,367 if you hold till maturity i.e., around 9 months later - whichever you think is more beneficial for you.

However, while dealing in the secondary market you would also have to keep liquidity in mind.

Edit: Another factor which is to be considered is the tax implications. Based on what is specified in the prospectus (Pages 32 and 33), sale/transfer of the bonds before maturity might be taxed differently (capital gains) as compared to holding the bonds till maturity (interest income - other sources).

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5

Can you please tell me the actual price of these bond , im having difficulty in calculating the price

6

I have a query. What if someone has not redeemed the bonds on maturity in 2021. How do they redeem it now in 2023?

7

Hy @Esmaralda_Stock

Ideally incase of maturity of bonds they shall be extinguished/debited from the account and the amount would have been credited to the bank account, in Zerodha its primary bank account.