Ennore Port and Jawaharlal Nehru Port Trust (JNPT) are in the processing of raising funds through issue of tax-free bonds. While Ennore Port is raising Rs 1,000-crore through the bond, JNPT would raise Rs 2,000 crore.
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.
Reports indicate that 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.
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.