L&T Long Term Infrastructure Bonds 2011-12 B Series (Tranche-1) Posted: 27 Nov 2011 05:34 AM PST L&T Infrastructure Finance Company Ltd has launched Public Issue of Long Term Infrastructure Bonds 2011 B Series (Tranche-1) of face value of Rs. 1,000 each, as nature of secured, redeemable, non-convertible debentures, having benefits under section 80CCF of the Income Tax act, 1961 (the “Tranche 1 Bonds”), not exceeding Rs. 1100 Crore for the FY 2012, to be issued at par on the terms contained in the Shelf Prospectus  – Tranche 1. For Application Form, mail at :     jainbroker@yahoo.in Issue Details Long Term Infrastructure Bonds 2011B Series (Tranche-1) Tranche 1 Bond Series 1 2 Issue Opens Friday, November 25, 2011 Issue Closes Saturday, December 24, 2011* Issuer L&T Infrastructure Finance Company Limited Listing BSE Trading Dematerialized form only following expiry of Lock-in Period Rating “(ICRA)AA+” from ICRA and “CARE AA+” from CARE Interest Rate 9% p. a. 9.00% p.a. compounded annually Face Value per Bond Rs. 1,000/- Rs. 1,000/- Frequency of Interest payment Annual Cumulative Registrar Sharepro Services (India) Private Limited. Minimum Application 5 Tranche 1 Bonds and in multiple of 1 Tranche 1 Bond thereafter. For the purpose of fulfilling the requirement of min subscription of 5 Tranche 1 bonds, an applicant may choose to apply for the Tranche 1 bonds across the same series or different series. Who can apply? • Indian nationals resident in India, who are not minors, in single or joint names (not more than three); and • Hindu Undivided Families or HUFs, in the individual name of the Karta. Debenture Trustee Bank of Maharashtra Lock in Period 5 years from the deemed date of allotment Issuance Dematerialized form or Physical form as specified by an Applicant in the Application Form. Buyback Facility Yes Yes Buyback Date The first Working Day after the expiry of 5 years from the Deemed Date of Allotment and the first Working Day after the expiry of 7 years from the Deemed Date of Allotment. Buyback Amount Rs. 1,000/- at the end of 5 years/  Rs. 1,000/- at the end of 7 years Rs. 1,538/62 at the end of 5 years/ Rs. 1,828/04 at the end of 7 years Buyback Intimation Period The period commencing from 6 months preceding the relevant Buyback Date and Ending 3 months prior to such Buyback Date. Maturity Date 10 years from the Deemed Date of Allotment 10 years from the Deemed Date of Allotment Maturity Amount 1000.00 2367.36 Yield on Maturity 9.00% 9.00% compounded annually Yield on Buyback 9.00% 9.00% compounded annually Tax Benefits Tax Benefit: THE TRANCHE 1 BONDS ARE CLASSIFIED AS “LONG TERM INFRASTRUCTURE BONDS” IN TERMS OF SECTION 80CCF OF THE INCOME TAX ACT AND THE NOTIFICATION. IN ACCORDANCE WITH SECTION 80CCF OF THE INCOME TAX ACT, THE AMOUNT, NOT EXCEEDING ` 20,000 PER ANNUM, PAID OR DEPOSITED AS SUBSCRIPTION TO LONG TERM INFRASTRUCTURE BONDS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR BEGINNING APRIL 01, 2012 SHALL BE DEDUCTED IN COMPUTING THE TAXABLE INCOME OF A RESIDENT INDIVIDUAL OR HUF. IN THE EVENT THAT ANY APPLICANT APPLIES FOR THE TRANCHE 1 BONDS IN EXCESS OF ` 20,000 PER ANNUM, (INCLUDING LONG TERM INFRASTRUCTURE BONDS ISSUED BY ANY OTHER ELIGIBLE ENTITY), THE AFORESTATED TAX BENEFIT SHALL BE AVAILABLE TO SUCH APPLICANT ONLY TO THE EXTENT OF ` 20,000 PER ANNUM. Other Conditions * The Issue shall remain open for subscription during banking hours for the period indicated above, except that the Issue may close on such earlier date or extended date as may be decided by the Board subject to necessary approvals. In the event of an early closure or extension of the Issue, the Company shall ensure that notice of the same is provided to the prospective investors through newspaper advertisements on or before such earlier or extended date of Issue closure. Interest on Application and Refund Money The Company shall not pay any interest on the application monies collected pursuant to the Issue pending allotment of the Tranche 1 Bonds. The Company shall not pay any interest on refund of application monies on the amount not allotted.

What are Short Term Debt Funds?   Short-term debt funds are mutual fund schemes that seek to invest primarily in debt / fixed-income instruments of shorter term of maturity. The fund manager endeavors to build a diversified portfolio of debt fixed-income instruments with varying maturities of shorter tenure.   Why L&T Short Term Debt Fund?   As interest rates tightening by RBI may be closer to peak, attractive investment avenues may be available in short term debt instruments. When inflationary expectations and interest rates cool down, investment avenues in quality debt instruments may be available.   Where L&T Short Term Debt Fund invests in?   The Fund endeavors to make investments in quality debt / fixed income securities and money market instruments.   Am I going to be charged an exit load?   Yes, an exit load of 0.5% will be charged if your investments are redeemed on or before 6 months; However, no exit load will be charged if investments are redeemed after 6 months. Please note that bonus units and units issued on reinvestment of dividends shall not be subject to exit load.   How can you invest?   Apart from traditional avenues of investing in a Mutual Fund Scheme, you can also invest online through www.lntmf.com, which is convenient, secure and fast. Minimum Application Amount:  For all options Rs. 5,000/- and in multiples of Re. 1/- thereafter

www.LNTMF.com SMS: LNTMF to 567678 TollFree: 1800 209 6565

Disclaimer:This material is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. This message should not be construed as solicitation for purchase of units of L&T Short Term Debt Fund. Any reference to the securities / asset class/ index herein is only for illustration purpose and is not recommendations from the AMC. Any performance information mentioned refers to the past should not be seen as an indication of future returns. Statutory Details: L&T Mutual Fund has been established as a trust under the Indian Trust Act, 1882 by L&T Finance Limited, Sponsor/ Settlor (liability restricted to the seed corpus of Rs. 1 lakh) with L&T Mutual Fund Trustee Limited as the Trustee Company and L&T Investment Management Limited as the Investment Manager.

Statutory Details: L&T Mutual Fund has been established as a trust under the Indian Trust Act, 1882 by L&T Finance Limited, Sponsor/ Settlor (liability restricted to the seed corpus of Rs. 1 lakh) with L&T Mutual Fund Trustee Limited as the Trustee Company and L&T Investment Management Limited as the Investment Manager.Risk Factors: All investments in mutual funds and securities are subject to market risks and the NAV of the Scheme of the Fund may go up or down depending upon the factors and forces affecting the securities market. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. Past performance of the Sponsor/AMC/Mutual Fund does not guarantee future performance of the Scheme. The Sponsor is not responsible or liable for any loss resulting fro m the operation of the Scheme beyond the initial contribution of Rs. 1 lakh made by it towards setting up the Fund. L&T Short Term Debt Fund do not in any manner indicate either the quality of the Scheme or its future prospects and returns; and is only the name of the Scheme. There can be no assurance that the objectives of the Scheme/ Mutual Fund will be achieved. Scheme Specific Risk Factors: Investment in the Scheme shall be subject to various risks including but not limited to risk associated with: Investment in Bonds and Fixed Income Securities such as Performance Risk, Credit Risk, Reinvestment Risk, Interest Rate Risk, Investment in Derivatives, Securitized Debt, etc. Please read the Scheme Information Document (SID) and Statement of Additional Information (SAI) carefully before investing. Investment objective and classification: L&T Short Term Debt Fund (An Open Ended Debt Scheme): The investment objective of the Scheme is to generate returns for investors with a short-term investmen t horizon by investing in fixed income securities of shorter term maturity. Load Structure: Entry Load: Nil, Exit Load: 0.5% - if redeemed on or before 6 months; Nil - if redeemed after 6 months. Bonus units and units issued on reinvestment of dividends shall not be subject to exit load. The investor is requested to check the prevailing load structure of the Scheme before investing.Asset Allocation: Debt and Money Market Instruments with residual maturity upto 24 months: 65%–100%, Debt Instruments with residual maturity greater than 24 months and less than 60 months: 0%–35%. The Scheme may invest in securitized debt up to 50% of the portfolio.The Scheme shall have derivatives exposure as per the SEBI/ RBI Guidelines issued from time to time. Further, the Scheme may undertake Interest rate derivatives transactions for the purpose of hedging and portfolio rebalancing (within the permissible limits specified by RBI/ SEBI from time to time). The average maturity of the Portfolio of the Sche me shall not exceed 3 years. Pending deployment of the funds in securities in terms of investment objective of the Scheme, the AMC may park the funds of the Scheme in short term deposits of the Scheduled Commercial Banks, subject to the guidelines issued by SEBI vide its circular dated April 16, 2007, as may be amended from time to time. The gross investments in securities under the Scheme which includes Debt, Money Market Instruments including Securitized debt & Derivatives shall not exceed 100% of net assets of the Scheme. However, following will not be considered while calculating the gross exposure: a) Security-wise hedged position and b) Exposure in Cash or cash equivalents with residual maturity of less than 91 days. The exposure to derivatives will be calculated on notional value of the derivative contracts. Terms of issue and mode of sale and redemption of units: Units of the Scheme are being offered at Rs. 10/- per unit during NFO and at NAV based prices, subject to the prevailing l oads, upon re-opening. The AMC shall calculate and publish the NAV of the Scheme on all Business Days. Investors are requested to note that ASBA facility is also available as an additional mode of payment during NFO. Units of the Scheme can also be transacted in demat mode (only) on the Mutual Fund Service System (MFSS) of NSE and/ or (StAR MF) of BSE. SID, SAI, Key Information Memorandum and Application Forms are available at offices/ branches of the AMC or CAMS Service Centres (CSCs) Distributors and at Mutual Fund website www.lntmf.com.

Good Time To Invest In Bonds Is Now! Probably

Posted: 09 Dec 2011 11:02 PM PST

Even the newcomer in the investment field knows that Reserve Bank of India has raised interest rates 13 times since March 2010. You might have also heard that it is bad for Indian economy as high interest rates is the result of high inflation and culminates in slow economic and industrial growth. However, there is the positive side of it as well.

Just two years prior, investors were ready to buy corporate bonds of 8.50% coupon rate. Today we are getting bonds with similar risk at coupon rates of as high as 12.50% and guess what, they are trading at discount with the yield-to-maturity (YTM) of more than 13.00%. So, why not grab them?

Well, buying bonds is one thing and when to buy bonds is another. We believe that NOW is the best time to buy them. Here’s why-

Peak Interest rates

This is definitely the main reason. Almost every big financial institution is of belief that interest rates have peaked in India. So, you may not get better interest rates in near future than you are getting now. It is an opportunity to grab, as most analysts have reiterated several times.

CRR May come down

Pressure is mounting on RBI to cut CRR by atleast 25 basis points (0.25%) very soon in order to ease liquidity in system. In fact, RBI governor D. Subbarao has also indicated that there might be a CRR cut soon.

Profit due to decrease in yield

If you buy long term bonds now, you might gain in short term due to decrease in yield. Let’s take a hypothetical example.

A bond has 12.50% coupon rate with 10-years YTM of 13.00%. The Rs. 1000 bond must be trading currently at Rs. 972.87. Suppose you buy it today and after 1 year our economic condition improves and interest rate comes down. Taking a conservative view, let’s assume 9-years YTM after 1 year for similar bonds is 12.00% (down 1 % from now). In this case the bond price will shoot to Rs. 1026.64.

So, your gain after 1 year will be the coupon payment of Rs. 125 plus the capital appreciation of Rs. 53.77. This sum up to profit of Rs. 178.77 on the payment of Rs. 972.87 resulting in 1 year percentage profit of 18.38%

Which bond to buy?

Always buy bonds or NCDs of known and established companies because the risk factor is low in such bonds and it helps you take advantage of decrease in YTM. Another important thing is, at this point of time, buy bonds with long maturity even if you want to invest for short term. As explained in above example- longer the maturity, the more the capital appreciation due to decrease in YTM