Non Convertible Debentures (NCDs) have the potential to offer investors a higher return then bank or company fixed deposits. These NCDs are listed on the exchanges and if you get the right price, your yields could be excellent. Take a look at 4 such listed NCDs.
India Infoline Finance N5 series
The India Infoline N5 series offers a coupon rate of 12.75%. These NCDs are currently listed at Rs 1013, and if you buy them now, your yield could be more than 13%. The interest is paid on 1st November every year and the NCDs expire in Sept 2018.
Muthoot Finance N7 series
The Muthoot Finance NCDs are currently quoted at around Rs 1023 on the National Stock Exchange. They have a coupon rate of 11.75%, but if you buy them now you would be entitled to interest in November and April, taking your yield to around 13%. The debentures expire in November next year.
Religare Finvest NI series
Religare Finvest N1 series has a coupon rate of 12.25% and the current market price is Rs 1031. The next interest payment date is April 1, 2014 and if you buy the NCDs currently your yield works to around 13%. The debentures expire in Oct 2015.
India Infoline Finance N6 series
The N6 series of India Infoline come with a coupon rate of 12.75%. If you buy these NCDs at the current market price of Rs 1032, your yield works to 13.52%.
An excellent yield considering the present bank deposit interest rates. An advantage of NCDs is that there is no TDS deducted like bank deposits. However, interest is liable to tax payment and you would have to add the interest income to your total income.
Remember, that one should be careful while investing in NCDs as they are not as safe as bank fixed deposits.