Discuss The Features Of Deep Discount Bonds?
Features of Deep Discount Bonds: Deep discount bonds are a form of zero-interest bonds. These bonds are sold at discounted value and on maturity; face value is paid to the investors. In such bonds, there is no interest payout during the lock- in period. The investors can sell the bonds in stock market and realize the difference between face value and market price as capital gain. IDBI was the first to issue deep discount bonds in India in January 1993. The bond of a face value of Rs. 1 lack was sold for Rs. 2700 with a maturity period of 25 years.
