Analysts say the effective interest rate earned by investing in these bonds is not as attractive as it was last year. The bonds have a five-year tenure with a put and call option at the end of three years. They carry a coupon rate of 5.5 per cent annually. Factoring in tax exemption (which is otherwise 20 per cent) on long-term capital gains, the effective interest rate compounded over three years translates to over 10 per cent. Under the current high-interest rate scenario, the return is less attractive than earlier.

“With a booming stock market, many investors may prefer investing there. Some may look at ploughing gains from capital gains on property back into real estate,” says Bhatia.

Fate Ceiled

•Sluggish demand for NHAI’s 54 EC bond this fiscal

•Two months into the offering, only Rs 60 crore raised

•Last year, Rs 350 crore raised within just five days of issue opening

•Rs 50 lakh investment cap for individual investor primary reason for listless interest

•Booming stock market providing attractive investment alternative