Shriram Transport NCDs 2012
A series of NCDs were issued by Shriram Transport in August 2012. Of these, the three year cumulative scheme which will expire in August 2017 looks attractive. The NCD offers an interest rate of 11.25% annually. You will have to buy the debentures from the NSE or BSE at Rs 1019, against the offer price of Rs 1000. On the NSE they are traded under the NT symbol, while on the BSE they are traded with the 934851 symbol.
If one buys the NCD at the current market price of 1019 and hold it for 30 months, one would get back 1373.19 on 13th August 2015. The annualised returns thus works to more than 13% considering the 30 month holding period and the redemption price of Rs 1373.19. These kinds of yields are almost impossible to get in the current interest rate environment.
Also, the NCDs are relatively safe considering the strong rating of Shriram Transport Finance and. are a perfect hedge against declining interest rates.
Fixed Deposits of Kerala Transport Development Finance Corporation (KTDFC)
The Fixed Deposits of Kerala Transport Development Finance Corporation is another excellent debt investment option that offers superior returns, as well as safety. Kerala Transport Development Finance Corporation is a government of Kerala undertaking and the fixed deposits are guaranteed by the government of Kerala.
The three year deposit gives an interest rate of 10.25 per cent, while for deposits above Rs 25 lakh you get an interest rate of 10.50 per cent. Being guaranteed by the Government of Kerala these fixed deposits come with a high degree of safety and default is almost ruled out.
If you can lock the fixed deposits for a longer duration like three years, you stand to gain more, considering that interest rates are likely to drop in the future.