Amaravati Bonds see no transactions on second day

Vijayawada: Not a single transaction was recorded on Tuesday on the second day of listing of the Amaravati Bonds as there were no sellers in the market. One bidder put an order to buy the bonds at the rate of Rs 1.75 lakh per bond.

In effect, he is ready to shell out Rs 8.75 lakh for the five-a-lot Amaravati Bonds the original cost of which is Rs 10 lakh. However, the investors were not ready to sell the bonds at discount.

The bonds were issued by Andhra Pradesh Capital Regional Authority with the State government of Andhra Pradesh extending a counter-guarantee. The bonds each costing Rs 2 lakh were issued for which the institutional investors invested Rs 10 lakh for one lot of five bonds.

They carry a fixed rate of interest of 10.32 per cent per annum paid quarterly with a 5-year moratorium on principal amount, which redeemed on yearly basis for next five years at 20 per cent a year.

On the day one also, there were no transactions registered in the bonds. Generally, investors would be in a hurry to sell the bonds to get back the amount they invested in purchasing the securities.

But they would sell them if there is some premium on the securities to get back some amount in profit. Rajeswara Rao, an investor, said that though they carry high rate of interest, few investors would be keen to buy them as they get fixed interest quarterly. Though a person wanted to buy them at discount rate, no investor was ready to sell them since they would fetch a high rate of interest, he added.