Should You Invest In 9.5% SREI Infra NCDs 2018 ?

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In the current regime when bond yields are rising focus is likely to shift to debt instruments and secured and unsecured NCDs by companies with 9.5% yield can be a good bet. Here is a breakdown on the features and various other important aspects.

Maturity term-

Investors can invest in these NCDs which have varied maturity terms from 400 days, 3, 5 and 10 years. The initial issue size of the NCD is Rs. 200 crore with an option to retain oversubscription to retain to a maximum of Rs. 20000 crore.

Other important features-

 The NCD issue by SREI Infra, the company financing infrastructure projects has been kept open from February 9, 2018 to March 7, 2018.
Interest rate as well as yield depending upon the series chosen works out to be 9.5%
The interest payment can be received in different payment modes such as monthly etc.
A minimum of investment in 10 bonds is to be made that means with a face value of Rs. 1000, an investor needs to invest a minimum of Rs. 10000.

Important aspects that make it a good bet-

Other than the interest rate and high yield of 9.5% amid an environment when rates are going down. The liquidity aspect offered through their listing on the exchanges is also a positive for the investment.

Also, if an application of SREI Infra NCDs is made via the demat account then there shall be no TDS deduction. Nonetheless, any interest payments on the NCDs are to be reported in the income tax return and are taxed as per the slab rate of the investor.

It is to be noted that individual investors can take risk in them by investing in secured SREI NCDs and avoid unsecured NCDs on offer.

 

Conclusion

In the current regime when bond yields are rising focus is likely to shift to debt instruments and secured and unsecured NCDs by companies with 9.5% yield can be a good bet.

Read more about: ncd, debt, srei infra ncds
Story first published: Wednesday, February 14, 2018, 14:59 [IST]
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