Acropetal Technologies Ltd IPO Message Board (Page 12)

Dear moneyguru,
Last time it closed on oct 23 & listed on Nov 12.So approx it may list on 18-20 March.Based on present interest rate scenario it should list at 10250-10300.Remember most of them are offering incentive for applying .You also ask for it.

DEAR SREEDHAR,
PLEASE TELL US WHEN WILL THE BOND OF SBI LIST IN THE MARKET AND CAN WE SELL THEM.IS IT JUST LIST SHARES THAT IT WILL LIST ON BSE AND NSE....WAT MAY BE THE LISTING PRICE......DATE OF LISTING?

SBI BONDS
EVERY YEAR IN MONTH OF MARCH YOU WILL GET INTEREST AT 9.75% FOR 10 YEARS BOND AND 9.95% FOR 15 YEAR BONDS HENCE EVERY YEAR AT MARCH RATE OF BONDS WILL BE RS 10000 FOR EVER RS 10000 INVESTED
IF YOU SELL SOME WHERE IN JAN YOU MAY GET RS 10800 OR SO ON AS PER THE INTEREST COMPONENT OF THAT TIME
INVESTMENT IN SHARE ,LAND , REAL ESTATE HAVE CAPITAL GAINS TAX AND INDEX COMPONENT I AM STILL NOT AWARE THAT BOND INVESTMENT QUALIFY FOR CAPITAL GAINS
PL GET YOUR SELF CLARIFIED FROM TAX CONSULTANT

sheedhar is talking about in case you sell in secondary market after one year of allotment,then indexation benefit is available.in response to CLD.

SBI BONDS
LAST TIME IN OCT 2010 INTEREST ON FIXED DEPOSIT WAS LESS AND HENCE THERE WAS AN RUSH FOR THE BONDS MOST OF THE MONEY OF THE RETAIL INVESTORS WHO APPLIED ON THE SECOND DAY OR LATE ON FIRST DAY WAS RETURENED HENCE THERE WAS MARGINAL PREMIUM AS COMPAIRED TO INTEREST
NOW MOST OF THE RETAIL SUBCRIBTION IS GOING TO GET ALLOTMENT AS COMPAIRED TO 9.25 INTEREST IN FIXED DEPOSIT FOR 555 DAYS .
FOR 10YEAR BONDS YOU ARE GOING TO GET 9.75% SIMPLE INTEREST ALSO SENIOER CITIZENS WILL NOT BENFIT FROM THIS BONDS AS RATE IS SAME AT 9.75%
TO SELL THE BONDS YOU REQUIRE .7%( BROKAGE AND TAXES) IN MARKET FOR RETAIL INVESTORS
NO LOAN CAN BE TAKEN
IF YOU HAVE ALEADY EXHAUSTED YOUR PPF LIMIT OF RS 70000 AND HAVE EXTRA INCOME IT IS BETTER TO INVEST FOR BONDS
FOR THOSE WHO PAY 30% TAX WILL HAVE TO PAY TAX RETURN WILL BE APPROX 7% INTEREST BETTER THAN SOME MUTUAL FUNDS WHO KEEP MONEY IN DEBIT
REMEMBER INTEREST HAS TO BE RE INVESTED EVERY YEARY
FORGET OF PREMIUM FOR LISTING GAINS

Sreedhar

Dear Sreedhar. I think you are missing out the interest part of the bond. Interest on bonds is being paid after every year. There is no cumulative option as such the bonds will not trade more than 10% premium on any given point of time during the year till interest is paid. Once the interst is paid, the bond will again be traded around issue price. there can be premium or discount in the begining of every fresh year after interest payment depending of interest senerio in the market. Remember, the final redumption either on call option or maturity will be at par only that is, you get Rs. 10,000 only from SBI for each bond held.

In short there cannot be indexation benefits in this case. This is my personal observation depending on logics.

I went through their website www.acropetal.com and a few things that were interesting are the awards from STPI for high growth and the team at acropetal looks decent. The key would be how they will be able to mitigate risks like keeping management team intact and grow, ensuring acquisitions are in place, and investments in new products. I should say it is a good investment considering the other ipos.

Bond matters

No TDS on SBI bonds no matter what the interest amount.

Instruments to be in demat form and listed.

Bonds can be subject to capital gains tax on selling in the secondary market.

Instruments are not eligible for loans.

Dear Sreedhar,

Will there be tax deduction @ source for income > Rs 10000 / financial year?

If yes, tax deduction at source will be 10% non-indexation or 30% (indexation + non indexation).

Please clarify.

I saw in one of the blogs following info:

The SBI Bonds are going to attract Long Term Capital Gain Tax of 20% with indexation and 10% without indexation. So if an investor applies for these bonds & sells them after March 31, 2012, he/she will get “Double Indexation Benefit”. Taking benefit of this & paying 20% with indexation, the tax liability would be almost near to zero or probably notional Capital Loss itself. So the investor will have a good time paying no taxes at all.

Suppose you invest Rs. 1,00,000 in these bonds, Cost Inflation Index (Notified by the Govt. every year) for 2010-11 has been 711 and assuming it to be 806 for 2012-13, your Cost of Investment comes out to be 1,13,361 (1,00,000*806/711). Taking into account 9.95% interest, the market value at that point in time would be near about Rs. 1,11,000. So there would be a notional Capital Loss of Rs. 2,361. I would recommend investors to apply for these bonds as its an all gain investment whether you want to invest for 9.95% (15 years)/9.75% (10 years) interest, Short Term Listing Gains or Long Term Capital Appreciation. These rates are very attractive from a bank like SBI. These bonds are just 2nd to RBI Bonds. Happy Investing!!

Dear CLD,

Thanx for your reply for brokerage charges.

Interest of 7% will be paid only if issue failed to get 75% subscription. Which is unlikely. Also basis of allotment will be on first come first serve basis ( based on date of application ).

This is what mentioned in page 20 of DRHP.

"""Allocation for the Series Bonds shall be made on a first come first served basis based on the date of Application in accordance with reservation for each Category as set out on page 17 of this Tranche 1 Prospectus. In case any Category is under subscribed, the unsubscribed portion of the reservation for such
21
Category will be allocated first to Retail Applicant Category, second to HNI Category and then to the Non-Individual Category, upto Rs. 20,000 million. In such an event of undersubscription, Series Bonds are allocated to another Category, interest on such Series Bonds will be as per the interest rate specified for such Applicants. In case of over subscription under the Retail Applicant Category, over-subscription will be retained upto the Residual Shelf Limit, at the option of the Bank. In case of over subscription under the Retail Applicant Category beyond the Residual Shelf Limit, the HNI Category and the Non-Individual Category, Applications received on the day of such over-subscription in respect of such Category, will be allotted on a pro rata basis, in consultation with the DSE / Lead Managers."""

SBI bonds can be traded like shares after listing which is expected within one month of subscription closing.

7 % interest is the interest paid for the period from closing date to allotment date & will be paid by the company to bond allotees soon after allotment

Since SBI is retaining substancial amount of oversubscription in retail category, I feel it will not get closed on the very first day.

Since retail subscription will be very high including retention of over subscription, the demand will not be so high since large no of retail investors will sell on listing day.

Taking into consideration of 0.7% of brokerage & other charges on sell, not much gains will be possible this time around unlike October issue when no oversubscription was retained.

Experts comments are requested please?

Sreedhar gaaru,
So what do think the 15 year bond might list at ? 200 premium ? But if the gmp is 3k for 1 lac application , then it should list at 400 rs premium, but is that possible ???
Also I don't find these bonds in nse website, how to search for these ?

Vishal R

I have enquired from HDFC Sec. customer care. The brokerage will be same as equity that is 0.5% on sell. Brokerage will be Rs. 2,500 for full application of Rs. 5 lakhs.

Dear Friends,

I would like to go for SBI bond. But let me know brokerage charges if any to sell bond in market.( i have account with HDFCSEC, SBICAP, SHAREKHAN ).

I will not apply for bonds, if brokerage charges for bonds are as high as brokerage charges for equity.

On seeing the names of these companies, I have decided not to go ahead even with single share. So I have not even read the analysis or seen the recco. I am also skipping all the 3 issues.

Gane.

Dear Bj,
10 year is at 9.25 .Now most of the fixed deposits are being offered at 9.25 hence no premium for it.At the time of listing in Nov 2010 the rate of interest was around 8.25 if I am not mistaken,hence the premium on listing at almost 5-8 percent.Now 9.5 is at 10388.So 150 premium for it.9.95 Interest is very high even by historical conditions since 9.5 is commanding good premium 9.95 should definitely command 400 premium per 10000 in my opinion.This is also my first investment in bonds.
It is first come first serve basis.You will find the forms in most of SBI branches & in places where you get IPO forms.Submit in designated SBI branches.

HNI & QIB are allowed to apply for 9.3% (10y) and 9.45% (15y) bonds only. They cannot apply for 9.75% and 9.95%, as these are reserved only for retail. After listing, I am not sure whether QIB / HNI can buy 9.75% & 9.95% bonds from market or not. If they cannot buy, retail will not benefit from heavy QIB / HNI demand. If you have any information about this, please share.

state Bank of India: Public issue of Lower Tier II Bonds
February 18th, 2011 No Comments


Attractive coupon rate of 9.95%- Apply if you have the funds- Listing gains likely
State Bank of India (SBI) is issuing bonds worth Rs 2000 crs, where there is a reservation of 50% for retail investors, 25% for HNI’s and 25% for QIB’s. The issue opens on Monday the 21st of February and closes on Monday the 28th of February.

The salient features of this scheme is that the rate of interest for retail investors is 9.75% for 10 year duration bond while it is 9.95% for 15 year duration. Similarly for HNI’s and QIB’s the rate of interest is 9.3% and 9.45% respectively.



The bank had come out with an issue of bonds in September 2010 and the issue was very well received and was oversubscribed. Looking at the appetite and rising interest rates, SBI has launched this scheme with an interesting feature. There is an interest rate differential for retail and non-retail investors with retail getting higher interest rates. Secondly the rate varies for shorter duration and longer duration with the longer duration of 15 years getting higher rates of interest. Thirdly the bank looking at the response on the previous occasion has kept an option to retain oversubscription in the retail category upto Rs 9,000 crs. The offer is initially for Rs 2,000 crs with half for retail and half for non-retail. No oversubscription in the non-retail category would be accepted but in the retail category it would be accepted upto Rs 8,000 crs.

The investor is likely to make money on listing and it should be understood what could be the gain. On straight thinking one would believe that the yield on the 9.95% and 9.45% interest on 15 year duration bonds would converge. Logically this would be correct but in reality it would not be so. The demand would depend on what amount is received from retail and also what is the appetite of the non-retail category. One must also keep in mind that when these bonds are listed for trading we would be in the middle of March, when money markets are very tight and liquidity is not only a concern but is at a premium. The corporate sector may not look at buying these bonds from the secondary market immediately but wait for April or the new financial year.

The earlier series bonds which are quoted on the exchange are available at Rs 10,340-10,350 and include interest for 106 days at 9.5%. This implies that the interest component is Rs 276 and the premium is Rs 64. The interest rate on this instrument is 9.5% and the duration is 15 years. The other instrument having a coupon rate of 9.25% and duration of 10 years is quoting at a discount to its issue price as the interest component of 106 days is Rs 268 and the bond is available at Rs 10230-10250.

This clearly indicates that retail investors looking to apply in this issue must opt for the 15 year duration only and as the bond would be listed on the exchange. The price at which the bond would list would be a premium to the issue price and it is likely to be around 2.5% to 3%.

The one risk that investors run is that the price of this bond would adjust on a yield basis if interest rates were to move up. If however the interest rates fell (which looks unlikely now) the quoted price of this bond would rise.

Investors looking for a safe return and not knowing where to park their surplus funds when the markets seem to be going nowhere should opt for investment in this bond offering. The retail limit in the bond scheme is Rs 5 lacs for retail investors.

Dear Friends,
Lets take a decision to skip all issues which do not have anything special to offer either in being niche or coming at lower valuations.All the three do not have anything to offer.my request is not even single one of us should apply for it.
let speculators & operators play in them.Secondary market lot of stocks are at good valuations.So better to buy them.