IDFC mops up Rs533 crore from tax-saving infra bonds

IDFC has plans to raise Rs5,000 crore from the infra bonds issue this fiscal

Infrastructure Development Finance Company (IDFC) said it had raised Rs532.6 crore through an issue of tax-saving infrastructure bonds. The bonds have been allotted against 2.6 lakh applications, IDFC informed the BSE.

The first tranche opened for subscription on 21 November 2011 and closed on 16 December 2011. The company has plans to raise Rs5,000 crore from the infra bonds issue this fiscal. The five-year bonds carry a coupon rate of 9%.
Amount raised through the first tranche this fiscal is 14% higher than its equivalent in FY11, the company had said in a statement.

The NBFC firm had mopped up Rs1,451 crore from over 7.3 lakh retail investors through the issue of long-term infrastructure bonds in FY11.


Indian exports register 3.8% growth in November

“Despite all odds and dismal global situation, we would be able to reach $275 billion by the end of this fiscal,” Federation of Indian Export Organisations (FIEO) president Ramu S Deora said

New Delhi: Exports grew by merely 3.8% to $22.3 billion in November 2011 year-on-year (y-o-y) due to the economic slowdown in western markets of the US and Europe. On the other hand, imports were up by 24.5% to $35.9 billion in the month y-o-y, reports PTI quoting the commerce ministry data.

In November 2010, exports stood at $21.2 billion while imports were at $28.8 billion.

A muted export growth is mainly due to declining demand from Europe and the US.

“Despite all odds and dismal global situation, we would be able to reach $275 billion by the end of this fiscal,” Federation of Indian Export Organisations (FIEO) president Ramu S Deora said.

Commerce secretary Rahul Khullar had said the total exports for the current fiscal would be about $280 billion, against the targeted $300 billion for 2011-12, due to slowdown in key European markets.

Due to better performance in the previous months, the country’s exports grew by 33.2% to $192.6 billion in the April-November 2011-12 y-o-y.

During the first eight months of the fiscal, imports also rose by 30.2% to $309.5 billion leaving a trade gap of $116.8 billion.

In November, oil imports grew by 32.2% to $10.3 billion. Non-oil imports rose by 21.69% to $25.6 billion over the year-ago period.

During April-November, oil imports stood at $94.1 billion, an increase of 42.67%. Non-oil imports rose by 25.4% to $215.4 billion.


Single premium, guaranteed 'double' return with insurance will entice customers says Kamalji Sahay

Star Union Dai-ichi (SUD) Life has just launched Dhan Suraksha Platinum. Depending on your age, it can almost double your investment after 10 years. The product also offers five times the premium as insurance component. This is a typical J-F-M (Jan-Feb-Mar) product to attract customers for tax-savings. The insurance component may be low, but customers looking for tax-savings are keen on getting good returns on investments. Excerpts from the interview with Kamalji Sahay, managing director and chief executive officer, SUD Life:

Moneylife (ML): The insurance component of Dhan Suraksha Platinum is only five times the premium. Don’t you think it is low considering that insurance products should have decent sum assured?

Kamalji Sahay (KS): This product is a single premium, guaranteed return product. Depending on the age, we are offering to almost double your investment in 10 years. Getting an insurance cover of five times the premium throughout the policy is an icing on the cake. No other product in the market offers it.

ML: There is already a product (Bajaj Allianz Guaranteed Maturity Insurance) in market which offers to double your investment in 10 years for any age. Your product offers 1.36 to 1.97 times your investment after 10 years. How is it competitive?

KS: The product you are referring to has decreasing sum assured. It offers five times the premium only in the first year. In the remaining nine years, the insurance is only 1.25 times the single premium. Our product (Dhan Suraksha Platinum) offers insurance of five times premium, which will remain through the policy. Due to this, our product will offer tax benefits of 80C at the time of entry and also 10(10) D at the time of exit.

The minimum ticket size is Rs1 lakh; which will offer insurance of Rs5 lakh. In case of premium of Rs5 lakh to Rs49.9 lakhs, there will be additional benefit of 2% of the premium payable on maturity. In case of premium of Rs50 lakh and above, 3% of the single premium is payable on maturity. 

We did want to structure our product to offer double the investment. There were some queries from Insurance Regulatory and Development Authority (IRDA) and hence we settled for 1.97 times the investment.

ML: Was there any delay in getting product approval from IRDA?

KS: No. Unlike the perception about regulatory delay in product approvals, we did not find any delay in our product approval.  

ML: The rate of return for Dhan Suraksha Platinum will be 7%, while a bank FD can offer almost 10% for 10-year FD. How will your product compete with bank FD?

KS: Our product does not compete with a bank FD. We are offering an insurance product. It will offer tax benefits at entry and exit. A bank FD may be taxable depending on the income. Banks are offering high rates for lower fixed deposit term and may not give a high rate for 10-year FD.

ML: Why is the product available for only three months? Is it because bank deposit rates may fall next year?

KS: True. We need to have proper debt instruments to lock in to be able to guarantee any returns.

ML: What is your target business for Dhan Suraksha Platinum?

KS: We plan to sell 10,000 policies in each of the three months of this quarter (Jan-Feb-Mar). With our strong bancassurance channel we should be able to achieve our target.

ML: What will be the agent commission for this product?

KS:  This is single premium product. We will offer 2% as commission.


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