Tax free bonds – NHPC vs PFC – which is better?

POSTED BY VG ON October 18, 2013 8:52 am COMMENTS (3)

Hi,

Both NHPC & PFC Tax free bond issues are open, with same interest rates.

I feel there’s very little to differentiate the 2, apart from issue size (PFC = 3875.9 cr, NHPC = 1000 cr).

I plan to invest in the 10 yr bonds. So would like to know which one you guys is better and why? Any points with regards to the company profiles, or do you feel both are equal and one can choose either?

Regards

Vaibhav

3 replies on this article “Tax free bonds – NHPC vs PFC – which is better?”

  1. ashalanshu says:

    Dear Vaibhav, Govt. can do anything but the possibility you are referring to is very remote.

    Thanks

    Ashal

  2. Vaibhav Goyal says:

    Thanks Ashal.
    I feel 20 yrs is quite a long lock-in period (if I don’t get a favorable price to exit midway in secondary mkt).
    But yes, might break my amount and put some of it in 15Y option.

    And is it not possible that govt may change tax laws, such that income on even the existing tax free bonds starts getting taxed?

  3. ashalanshu says:

    Dear Vaibhav, both are equal. may i know, why tyou are not opting 20Y term to lock higher rates for next 20Y?

    Thanks

    Ashal

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