While interest on fixed income bearing instrument such as fixed deposits is likely to trend higher in not so distant future due to a combination of macros that are into play currently, you in the current scenario can put your bets on the new NCD offers without a second thought if you are on the lookout for regular returns.
DHFL AAA rated NCD issue: The issue with a CRISIL and Brickwork rating of AAA reflects the highest ability to meet out principal and interest repayments and offer a significant 2% higher return than Bank FDs with 9.1% coupon rate per annum.
Here in are some of its features
1. The DHFL NCD or non-convertible debenture issue comes with seven series. 3 and 5-year NCDs are available with monthly pay out option while the rest all series are available with annual pay-out stream.
2. Additional interest rate as one-time payment anyway in the range of 0.5% to 1% is also on the offer with the NCD issue.
3. It is a secured, redeemable NCD issue which means investors have a right to claim from company's defined assets in case the company defaults.
4. The issue size of the NCD is Rs. 12000 crore and investors can put in a minimum of Rs. 10,000 in the issues.
5. DHFL NCD issue would close on June 4, 2018.
6. Interest rate: For the three years term, NCD offers fixed annual pay-out of 8.9%. For the tenure there is also the option of monthly pay-out with interest @ 8.56% and floating rate annual pay-out with MIBOR and 2.16%.
For 5 years tenure, NCD offers annual coupon of 9% while fixed monthly pay out is pegged at 8.65%. For 7 and 10-years, the annual coupon rate is 9% and 9.1% per annum respectively.
Given the fact that return from debt mutual funds has also faded for quiet some now and in fact have remained volatile, individuals in lower tax bracket can consider investing in NCD issue by DHFL and earn post-tax return of over 8% per annum. Also, in case with your NCD issue investment if you are looking for liquidity aspect, you can hold them in dematerialized form.
Individuals on the look out for regular payout can opt the NCD issue with 3 to 5 years tenure depending on their investment objectives.