Non Convertible Debentures also called NCDs are issued by various corporates from time to time. Once they are issued, they are listed either on the BSE or the NSE.
Some of the popular NCDs that are listed include those from Shriram Transport Finance, Muthoot Finance, Manappuram Gold etc. One can view the prices of the listed NCDs on the exchanges and then take a call whether ones wants to buy the same or not.
Here is a list of listed NCDs on the exchanges and this is not exhaustive.
|Muthoot Finance N5||Rs 1000||12.00%|
|Muthoot Finance N8||Rs 970||11.75%|
|Shriram Transport N6||Rs 1140||9.75%|
|Shriram Transport N7||Rs 980||9.50%|
|Mannapuram N2||Rs 1004||11.20%|
|Manappuram N3||Rs 1006||12.00%|
|India Infoline Housing||Rs 1026||12.00%|
There are a host of other companies that have issued NCDs from time to time.
How to purchase or buy NCDs?
As mentioned earlier, NCDs are listed on the NSE and BSE. You can type the price and under the securities information you would get all other information like:
a) Coupon rate
b) Next interest payment date
c) Maturity payment date
d) ISIN number
e) Security issue date
f) Face value
g) Credit rating etc
Now once you have this info, you can calculate the interest rate yield and arrive at the returns that you are likely to make from the NCDs. It is best to hold the NCDs till maturity to gain maximum from it.
The one good thing is that in case you do not wish to hold till maturity you can sell the same through the exchanges.
However, NCDs are not very liquid and one should be careful before buying large quantities.
How to check yield of non convertible debentures?
Before buying an NCD it is best to also check the yield. For example, if you purchase the NCD from the market at Rs 1000 and the interest is 10 per cent, then your yield would depend on the date you have purchased.
For example, if the interest payment date is April and you purchased it in December, your yield would be much higher then 10 per cent, since your holding period it only 3 months.
Yield and security are two of the most important factors when you consider an NCD. There are a host of NCDs and initially, if you have no clue on this instrument it would be worthwhile to check for professional advise.