Ennore Port, JNPT and Dredging Corporation of India are in the capital market to raise Rs 3,500 crore through three separate public issues.

This is part of the Rs 5,000-crore tax-free bonds allotted to the port sector in the last Union Budget.

Ennore was the first one to enter the market with Rs 1,000-crore issue, followed by Dredging Corporation of India with Rs 500 crore. JNPT on Friday announced its Rs 2,000 crore bond issue opening on Monday.

Tax-free bonds are a low-cost source of raising funds. The advantage for the investor is that the money invested in such bonds is fully exempted from income-tax.

This is the first time ports are going for a public issue of tax-free bonds. Ennore Port offers two categories of bonds: 10 year bonds bearing annual rate of interest of 7.01 per cent and 15 years offering 7.17 per cent. However, retail investors will get an additional interest of 0.50 per cent. Ennore is the only corporatised port in the country. JNPT offers 10- year bonds at 6.82 per cent interest. Retail investors will get an additional interest of 0.50 per cent.

According to the port trust, the bonds are “AAA” rated ensuring highest safety of the funds, which explains the lower rate of interest.

The funds raised through the bond issue will be used mainly for meeting the dredging expenses.

JNPT has recently awarded a dredging project costing Rs 1571 crore.

JN port is the largest container port in the country, handling more than four million TEUs of cargo.

The Hyderabad based Dredging Corporation of India is offering 10-year bonds at 6.97 per cent. Retail investors will get additional 0.50 per cent.

kurup.nk@thehindu.co.in

(This article was published on March 8, 2013)
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