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This Instrument Gives An Interest Rate Of Up To 9.25%, Should You Invest?

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The secured Non Convertible Debentures of India Bulls Housing Finance is now open for subscription. The issue of these NCDs will now close on December 20, 2021. Let us tell you some of the finer details of this instrument and whether you should subscribe.

 
This Instrument Gives An Interest Rate Of Up To 9.25%, Should You Invest?

Interest rate for individuals looking for monthly income:

MonthsInterest rate on monthly income
248.42%
368.66%
608.89%

Interest rate for individuals looking for annual income:

MonthsInterest rate on annual income
248.75%
369.00%
609.25%

Should you subscribe to the NCDs?

To begin with non convertible debentures can be secured or unsecured. These are secured debentures, so they are less risky in a way. According to the company, the security cover is 1.25 times of the principal and interest thereon.

The interest rate is pretty decent, though the issue always remains of safety. Only investors who are willing to take a slight risk can subscribe.

NCDs to be listed on the exchanges

Since the NCDs will be listed on the exchanges they are liquid and can be sold in case of emergency. However, since the interest rates are good, there is no point selling. Apart from this, the one problem is that the liquidity is not too good for these instruments when you want to sell through the exchanges. So if you subscribe and are allotted large amounts it maybe hard to sell. For smaller quantities it may not be an issue. All in all, we think it would be a good idea to go for the more shorter term tenure of 24 months. The longer term tenure would be more risky, despite being secured non convertible debentures.

Disclaimer

Investing in NCDs is risky. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article.

Read more about: ncd interest rates
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