Home » Bonds & Debentures » Launch Of National Highway Authority Of India (NHAI) Tax Free Bonds- Issue To Open On 28th Dec, 2011

Launch Of National Highway Authority Of India (NHAI) Tax Free Bonds- Issue To Open On 28th Dec, 2011

National Highways Authority of India (NHAI) is going to launch its tax-free bonds issue of Rs 10,000 crore. This issue will be open from 28th Dec 2011 to 11 Jan 2012. The coupon rate on this tax free bonds will be 8.2% for 10 years and 8.3% for 15 years.


NHAI issue of tax free bonds with an average of 8% coupon rate is quite comparable with other investment alternatives available in the market. As making investment under other products which attract tax, will generate equivalent returns on higher interest rates as compare to NHAI tax free bonds.

Key Features Of NHAI Tax Free Bonds
  • Tax Free
    • Interest earned on these bonds will be fully exempt from tax.
    • There is going to be no deduction of Tax deducted at source (TDS) on income earned on these bonds.
    • No wealth tax will be applied on these bonds.
    • Capital gain tax will be applicable on these bonds.
  • Secured :- NHAI bonds scored highest credit rating i.e AAA.
  • Minimum Application Size :- Rs 50,000 for retail investors and thereafter in multiples of Rs 1000.
  • Redeemable :- Investor can redeem his bonds by selling before maturity of bonds.
  • Non Convertible
  • Bond Allotment :- Bond allotment will happen on the basis of first come first serve basis for high net worth individuals and institutions and on pro rata basis for retail investors.
  • Available in both physical and demat form.
  • Multiple application are allowed.
  • Can be applied on single name or jointly.


Series I

Series II

Face Value Rs 1000 Rs 1000
Coupon Rate 8.20% 8.30%
Tenure 10 Years 15 Years
Interest Payment Annual Annual

This issue will bring better returns as compare to fixed deposits in long run as fixed deposit rates may go down in next few months but this issue will offer 8.2% coupon rate for next 10 years and 8.3% for next 15 years. Investors will be able to generate high capital gain by selling these bonds in the event of a fall in interest rates.

(Note:- Power finance corporation of India (PFC) is also going to launch its tax free bonds on the same date i.e 28th Dec 2011.)

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