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Perpetual Bonds – Bonds With No Maturity Date

Perpetual bonds are the bonds with no maturity date. Which means the investor (bondholder) do not get the right to redeem the bonds at any point of time. Only the issuing company can take back i.e buy back the bonds from the investors.

To indemnify the fact that the bond holder can never redeem their investment – company pays higher returns to the investors until he holds the same. Ones the bond is sold, the rights of future profit and benefits passes to the new bond owner.

Companies issue these bonds to serve their long term financial needs. So in most of the cases its tenure varies between 10 to 20 years.

Perpetual bonds offers essence of equity at lesser cost to the investors. Mostly insurance and pension companies invest in these funds to get better returns, retail investor usually don’t take interest in this kind of investments. As getting higher return can appeal investors but not at the sake of the principal amount invested.

I have collated a small list of companies (as per my knowledge) offering Perpetual bonds in India. Lets have a look:-

  • Indian Railway Financial Corporation (IRFC)
  • Tata Power
  • State Bank Of India (SBI)
  • Tata Steel
  • IDBI Bank
  • Tata Motors
  • Bank Of Baroda
  • Bank Of Maharashtra
  • Yes Bank
  • Indian Overseas Bank (IOB)
  • ICICI Bank
  • State Bank Of Mysore
  • Punjab National Bank (PNB)
  • Union Bank

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