IRFC (Indian Railway Finance Corporation) Tax Free Bonds have opened today and are probably the last TAX FREE bond issue for the year. There is no provision in the budget for 2016-17 for any tax free bonds and any new issue in the next year is extremely unlikely.

Additionally, this is the only issue in 2016 to date for which NRI’s are eligible.

Salient features:

Issue Date – 10th Mar to 14th Mar

Issue Size – Rs. 2450 Crore, of which 60% is reserved for retail investors ~ 1470 crore rupee

Eligibility – both NRI’s and residents

Coupon Rate – yearly interest rate of 7.29% for its 10-year option and 7.64% for the 15-year option to the retail investors investing less than or equal to Rs. 10 lakh

Rating – AAA from CRISIL, ICRA and CARE

There is a very high likely hood that the issue will get oversubscribed in the Retail segment on day one, anyone looking to invest should make an application today.

The current SGD to INR exchange rate is 48.20 offered by DBS Remit. I just made my application and would be looking for capital gains of appx. 15-20% on these bonds over the next 2 years.