The REC bonds received tremendous response from the market as they were oversubscribed seven times over the issue size of Rs. 5,000 crore.
The bond issuance was rated AAA by top credit rating agencies, including CARE, CRISIL, ICAR, and IRRPL. ZCB are issued at deep discount and are redeemed at face value. Since these ZCBs are CBDT notified, investors are benefitted in the form of lower taxation as redemption of ZCB on maturity is treated as long term capital gain and is accordingly taxed at a much lower rate of 12.5% p.a.
The last issuance of CBDT notified ZCB of REC was done in FY 2010-11.
Net pay-in of Rs. 2,712.50 crore against the bond issuance shall happen on 3rd September 2024.
