For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Shriram Transport Finance NCDs Offer Interest Up To 9.1%: Should You Invest?

|

At a time when fixed deposit rates are low, Indian investors are looking at alternatives to grow their funds. One such opportunity at the start of 2020 is an NCD issue that is scheduled to be offered by Shriram Transport Finance.

Shriram Transport Finance NCDs Offer Interest Up To 9.1%: Should You Invest?
 

This asset financing Non-Banking Finance Company will be issuing its Non-Convertible Debentures (NCDs) in the market on 6 January. The issue's base size is set at Rs 200 crore with the option to retain up to Rs 1,000 crore by the company in case of oversubscription.

The Tranche 2 Issue of these Secured Redeemable NCDs with a face value of Rs 1,000 each will close for subscription on 22 January 2020.

Tenure

Series 1 2 3 4 5 6 7 8
Frequency of Interest Payment Monthly Monthly Monthly Annually Annually Annually Cumulative Cumulative
Tenor 3 Years 5 Years 7 Years 3 Years 5 Years 7 Years 3 Years 5 Years
Coupon Rate (Retail) 8.52% 8.66% 8.75% 8.85% 9.00% 9.10% NA NA
Effective Yield (per annum) 8.85% 9.00% 9.10% 8.84% 8.99% 9.09% 8.85% 9.00%
Amount on Maturity Rs 1,000 Rs 1,000 Rs 1,000 Rs 1,000 Rs 1,000 Rs 1,000 Rs 1,289.99 Rs 1,539.35

Ratings

This issue is rated as CRISIL AA+/Stable by CRISIL, CARE AA+/Stable by CARE and IND AA+/Stable by India Ratings and Research Private Limited. Instruments with such ratings are considered to have the highest degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

How to invest?

You can invest in the public issue of NCDs by submitting an application form via your bank or broker (only self-certified syndicate banks) authorizing them to block funds towards the issue.

Liquidity

The NCDs are proposed to be listed on NSE and BSE. If you wish to not stay invested till maturity, you can sell these on the stock exchanges.

Should you invest?

While the interest rates offered on these NCDs are slightly higher than fixed deposits and government-backed schemes like National Savings Certificate, they hold the risk of default. Further, interest earned on NCDs is fully taxable.

Read: How Is Income From NCDs Taxed?

 

While Shriram Transport Finance has a strong reputation, it is only advisable to invest in NCDs if you are an investor with a high-risk appetite.

Further, if you do choose to invest, it is best to hold the NCD till maturity unless you have an expert that can help you sell at the right time to make high returns.

Read more about: shriram transport finance ncd
Story first published: Friday, January 3, 2020, 16:52 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more