Gurugram: REC Limited has raised CBDT-notified Zero Coupon Bonds (ZCB) of Rs 5,000 crore at an effective yield of 6.25 % p.a.
REC bonds received tremendous response from the market as the bond was oversubscribed 7 times over the issue size of Rs. 5,000 crore.
The bond issuance was rated AAA by all four credit rating agencies (CARE, CRISIL, ICAR, IRRPL).
Zero coupon bonds are long-term, non-interest-paying bonds sold at a deep discount from their face value. These bonds offer investors a long-term investment opportunity, allowing them to save for long-term goals.
Since these ZCBs are CBDT notified, investors are benefitted in the form of lower taxation as redemption of ZCB on maturity is treated as long-term capital gain and is accordingly taxed at a much lower rate of 12.5% p.a.
The last issuance of CBDT notified ZCB of REC was done in FY 2010-11. Bonds will be listed on BSE and NSE.
